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7/31/2019 SP3_Help

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Revaluation of Assets

When any historical cost of a depreciable asset undergoes change due to increase or decrease in long-term liability because of exchange fluctuations, price adjustments,changes in duties or similar factors, the depreciation on the revised unamortized

depreciable amount should be provided prospectively over the residual useful life of theasset. In case the revaluation has material effect on amount of depreciation, the sameshould be disclosed separately in the year in which revaluation is carried out.

Method of Depreciation

It is permissible for a company to follow different depreciation methods for different typesof assets. The same methods should be followed every year. A change in method canbe made only if such change is required by statue or for compliance with accountingstandard issued by the Institute of Chartered Accountants of India, or if the changewould result in more appropriate preparation and presentation of financial statements of enterprise.

Pro-rata Depreciation

In any financial year, if any addition or deletion is made in the asset (means, asset hasbeen sold, discarded, demolished or destroyed) then the depreciation on such assetshall be calculated on a pro rata basis from the date of such addition or up to the date of such deletion based on actual number of days. If the financial year is more or less than12 months then rates of depreciation of schedule XIV should be taken proportionately.

Depreciation in case of Multi Shift Operations

Calculations of the extra depreciation for double shift and triple shift working shall bemade separately in the proportion of the number of days for which the concern worked indouble shift or triple shift, as the case may be, bears to the normal number of workingdays during the year. For this purpose, the normal number of working days during theyear shall be deemed to be –

In case of a seasonal factory or concern, the number of days on which thefactory or the concern actually worked during the year or 180 days, whichever ishigher.In other case, the number of days on which the factory or the concern actuallyworked during the year or 240 days, whichever is higher.

The extra shift depreciation shall not be charged in respect of any item of machinery or plant, which has been specifically exempted by inscription of the letters “N.E.S.D” (NoExtra Shift Depreciation) against it in sub-items as specified in Appendix II and also inrespect of the items of machinery and plant to which the general rate of depreciation of 13.91 per cent applies as given in Appendix II to this document .

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Depreciation on Assets value less than Rs 5000

If the value of the individual item of asset whose actual cost is less than Rs 5000 andbelongs to any category other than Plant and Machinery, then rate of depreciation is

100% in the year of acquisition. If the item belongs to category of Plant and Machineryand if the actual cost of each item is less than Rs 5000 and less than 10% of the value of total Plant and Machinery the asset can be written off to the extent of 100% in the year of acquisition. Else, depreciation rates as specified in schedule XIV of the Companies

Act.

Depreciation as per Income Tax Act

Depreciation claim is not optional. From the assessment year 2002-03 depreciation isavailable for assessee whether the assessee has claimed, the deduction for depreciationin computing his or her total income, or not.

Types of Assets on which Depreciation can be claimed

Depreciation is allowed on tangible and intangible assets.

Tangible Assets

Types on tangible assets on which depreciation is allowed:

1. Building2. Machinery3. Plant4. Furniture

Intangible Assets

Types of Intangible assets on which depreciation is allowed:

1. Know-how2. Patents3. Copy Rights4. Trade marks5. Licenses6. Franchises or any other business or commercial rights of similar nature

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Special Conditions

1. Block exists but WDV of block becomes zero: in this case no depreciation isallowed. The value of block reduced below zero is termed as Short Term CapitalGain.

2. Block ceases to exist but WDV exists: in this case no depreciation is allowed.The value of block is Short Term Capital Loss.3. In case of succession, amalgamation, business reorganization, and de-merger in

the year in which this occurs, depreciation is calculated as:

a. Calculate depreciation for previous year in which such change occurs asif such change did not take place.

b. Amount of depreciation as calculated above is apportioned between the:

i. Predecessor and successor ii. Amalgamating and amalgamated companyiii. Demerged and resulting company

As the case may be, in the ratio of number of days for which the assets are usedby predecessor and successor/amalgamating and amalgamated company/demerged and resulting company during the previous year in which ownershipchanges.

4. If the asset is put to use for less than 180 days in the year in which it is acquiredthen depreciation on such asset will be 50% of normally calculated depreciation.But in case the asset has been used even for one day in the subsequent year then the depreciation would be calculated on the normal rate.

Additional Depreciation If the assessee is engaged in manufacture or production of any article or thing, and hasacquired and installed a new eligible plant and machinery after 31/03/2005, thenassessee is eligible for additional depreciation.

Assets not Eligible for Additional Depreciation

1. Intangible Assets2. Buildings

3. Furniture4. Ships and Aircrafts5. Used Plant or Machinery6. Plant or Machinery installed in any office premises or residential accommodation

or guest house7. Any office appliances or road transport vehicles8. Any plant or machinery, the whole of the actual cost of which are allowed as a

deduction in computing income chargeable under t he head “Profits and Gains of Business or Profession” for any previous year

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Additional Depreciation Rate

Additional depreciation rate is 20%. If the asset is put to use for less than 180 days in

the acquired year then the additional depreciation rate will be 10%. Additionaldepreciation is available only in the year in which the new plant or machinery is first putto use.

Calculation of Depreciation as per Companies Act

Depreciation Book Card

Navigation:Financial Management → Fixed Assets→ Set up→ D epreciation Book

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Field Description :

Use Fiscal Year Days : Place a check mark in this field and the program willautomatically take the denominator as 365 days for the depreciation s calculation.Denominator s value will be 366 days for the leap year.

Click General Ledger, Setups, Accounting Periods

Create accounting period for calculating depreciation.

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Use Fiscal Year Days field in Depreciation Book card has the number of days as definedin Accounting Periods. The program will automatically take the denominator as 365 daysfor the depreciation s calculation. Denominator s value will be 366 days for the leap year.

Fixed Asset Card

For each fixed asset, you must set up a card containing information about the asset.

Navigation:Financia l Management → Fixed Assets→ Fixed Assets

To create a Fixed Asset, fill the fields in FA card as follows:

No. : FA000130 Description: Plant & Machinery Serial No. : FAPM01

FA Class Code: Tangible FA Sub class code: Machinery FA location code: Prod.

Depreciation Book Code: Company FA posting Group: Machinery Depreciation method: Straight-line Depreciation starting date: 01/04/06 Straight-line %: 20.00

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Book value: 2, 00,000

Book value will be affected after making Acquisition of Fixed Asset through FA G/LJournal or Purchase order/Invoice.

Calculating Depreciation

Navigation:Financial Management → Fixed Assets→ Periodic Activities→ CalculateDepreciation.

On the Fixed Asset tab, you can set a filter to select the assets he/she wants todepreciate. For example: enter FA000130 in the Filter field.

On the Options tab, enter the information shown in the following picture:

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Click OK to calculate the depreciation on 31/03/07

The batch job has calculated depreciation for fixed asset number FA000130 and createdlines in the Fixed Asset G/L Journal window.

Click Fixed Assets, FA G/L Journals. The Fixed Asset G/L Journal window appears .

The batch job has calculated depreciation for fixed asset number FA 000130 andcreated lines in the Fixed Asset G/L Journal window.

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The No. of Depreciation Days field has been filled in. When you run the batch job, theprogram calculates depreciation only over the number of days entered in this field. Theprogram normally would calculate the depreciation days

The balancing line is created because the Insert Bal. Account field on the Options tab for the Calculate Depreciation batch job is selected.

Click Posting, Post to post the journal.

Viewing the Ledger Entries

To see the posted entries for fixed asset number FA000130, follow these steps:

Click Fixed Assets, Fixed Assets. Browse to the card for FA000130.

On the line, in the Book Value field, click the Assist Button to open the FA Ledger Entrieswindow.

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Depreciation has been calculated by taking the values as follows:

Book value: Rs. 2,00,000FA posting date of depreciation: 31/03/07 (depreciation ending date)Depreciation period (12 months): 365 days.

Calculated depreciation amount = 200000*20/100*365/365 = 40000 .

Minor Assets

There are two significant settings in the FA depreciation book for minor assets:

The depreciation method is normally straight-line.The depreciation starting date and the depreciation ending date are the same.Due to this reason the program always calculate 100% depreciation; even other acquisitions and depreciation have already been posted to this asset.

Example

Create a fixed asset called Minor Assets 5000The fixed asset should have the following depreciation book information

Depreciation Book Code : Company FA posting Group : Machinery Depreciation Starting Date : 01 /04 /06Depreciation ending Date : 01 /04 /06

You can set up a separate G/L account and FA posting Group for minor assetdepreciation. However, for this example we will simply use the existingmachinery posting group.

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Using the FA G/L journal, add the following acquisition costs for the year. Thebalancing account number for each acquisition is G/L account 2910.

Date Acquisition01/04/06 100001/07/06 100001/10/06 1000

Once you have posted the journals, the Minor Assets 5000 Fixed Asset cardshould look like this:

You set up one Minor Asset per year in Fixed Asset Card because the legislationfor minor assets may change from one fiscal year to the next. Each time youpurchase an asset that is classed as a minor asset, you post the acquisition costand depreciation to the same Minor Asset Card you have set up. The acquisitioncosts of all minor assets will be collected on this asset and depreciated by 100%when the next periodic depreciation is calculated.

Click Fixed Asset, Periodic Activities, Calculate Depreciation.On the Fixed Asset Tab, enter the No . from the minor asset fixed asset card inthe No. Filter field.Fill in the Options Tab as follows:

Depreciation Book: Company FA Posting Date: 31 /03/07Posting Date: 31 /03/07Description: Depreciation Minor Asset 5000.

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Click OK to run the batch job and then click Fixed Assets, FA G/L journals to lookat the journal created by the batch job.Click Functions, Insert FA Bal. Account to insert a balancing account and thenpost the journal.

If you open the Fixed Asset card for the minor assets you will see that the bookvalue is 0. You can see the journal entries by clicking the Assist Button in theBook Value field.

The above example shows several postings of acquisition costs during a fiscal year andone yearly calculation of depreciation. However, you can also depreciate minor assetsevery month if you want. The asset will always depreciate 100% of the current book

value at the time the depreciation is calculated.If you had run the Calculate Depreciation batch job on 30/09/06 (before you entered the01/10/06 acquisition), and then run it again on 31/03/07, you would get the followingresult:

Date Acquisition Cost Depreciation01/04/06 100001/07/06 100030/09/06 -200001/10/06 100031/03/07 -1000

Multiple Shifts

If the particular asset is used in single shift for 3 months, in double shifts for 3 months,and in triple shift for 6 months in a particular financial year you need to go through theinformation given below.

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Navigation:Financial Management → Fixed Assets→ Set up→ Depreciation Book

Fill in the fields according to these guidelines:

Field Comments

No of Days Non Seasonal Define 180 days or actual working days of the concern whichever is higher.

No of Days Seasonal Define 240 days or actual working days of the concern whichever is higher.

Fixed Asset Card

For each fixed asset, user must set up a card containing information about the asset.

Navigation:Financial Management → Fixed Assets→ Fixed Asse ts

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To create a Fixed Asset, fill the fields in FA card as follows:

No. : FA000130 Description: Plant & Machinery 01 Serial No. : PM01 FA Class Code: Tangible

FA Sub Class Code: Machinery FA Location Code: Prod. Depreciation Book Code: Company FA posting Group: Machinery Book Value: 1, 00,000

Book value will be affected after making Acquisition of Fixed Asset through FA G/LJournal or Purchase order/Invoice .

Click Depr. Book, Shifts

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When the asset is used in multi shifts then you have to fill the FA shift form in the FAcard.


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Field Comment

Depreciation Book Code The Depreciation Book Code is set todefault value automatically from the Fixed

Asset card.

FA Posting Group The FA Posting Group is set to defaultvalue automatically from the Fixed Assetcard.

Depreciation Starting Date Define the starting date of asset used inshift.

Depreciation Ending Date Define the ending date of the asset usedin shift

Depr. Method Define the depreciation methodapplicable for the asset.

Straight Line % Define rate of depreciation in this field.

Shift Type Define the shift type for which the assethas been used. The available options aresingle, double, and triple.

Industry Type Define the industry type. The availableoptions are Normal, seasonal, and non-seasonal. Normal type of industry is usedfor single-shift.

Used no of days Define the actual no of days, the assethas been used during the period, whenthe actual no of days are different fromstarting date and ending date of depreciation.

Create FA Shifts card

First Line

Depreciation Book code : The program automatically inserts a book code (For example Company).

FA Posting Group : The program automatically inserts a posting group (For example Machinery).

Depreciation Starting Date : 01/04/06 Depreciation Ending Date : 30/06/06 Depreciation Method : Straight-line Straight-line % : 10.00 Shift type : Single

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Industry Type : Normal Used No. of Ddays : 50.

Second Line



Depreciation Starting Date : 01/07/06 Depreciation Ending Date : 30/09/06 Depreciation Method : Straight-line Straight-line % : 20.00 Shift type : Double Industry Type : Seasonal Used No. of days : 40

Third Line



Depreciation Starting Date : 01/10/06 Depreciation Ending Date : 31/03/07 Depreciation Method : Straight-line Straight-line % : 30.00 Shift type : Triple Industry Type : Seasonal Used No. of Days : 100.

Close the form.

Note 1: You have to create the FA Shifts form for each asset that has been used for multiple shifts in FA Card.

Note 2: If the concern is working for only single shift: When the concern is workingin single shift the depreciation calculation will be done from FA Card line level; you onlyneed to place a check mark in the use fiscal year days field in the Depreciation bookcard, after which the program will calculate the depreciation by taking the denominator

either as 365 days or 366 days (in case of leap year). Also, there is no need to fill any FA Shifts form in the FA card.

For every financial year you have to create new lines in shifts form if the asset is used inmulti shifts.

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Note 3: If you have defined some or all fields in the line level of the Fixed Asset card andhave also defined in the FA shift form in FA card then application will give priority to theshift form.

Note 4 : If you have placed a check mark in the use fiscal year day s field in thedepreciation book and also defined the FA shift form in FA card then the program willgive priority to the shift selected from the drop down box and the denominator for calculating the depreciation will be as follows.

For Single shift - denominator will be the 365/366 days if you have placed a check markin the depreciation book card.

For double shift: - denominator will be the days defined in the No days Seasonal /NonSeasonal field in the Depreciation book card.

For triple shift- denominator will be the days defined in the No day s Seasonal /NonSeasonal field in the Depreciation book card.

Note 5 : As per the law shift type single will always known for Normal Industries andShifts type Double/Triple will always known for seasonal/ non-seasonal industries.

Note 6 : While entering Depreciation Start date and Depreciation End date in shifts form(for particular FA card) program will not allowed any overlapping of these dates.Example if in first line you have mention 01/04/06 (start date) and 30/06/06 (End Date),on second line you are not permitted to any date lying between 01/04/06 to 30/06/06.This validation is valid for the same financial year.

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Navigation:Financial Management → Fixed Assets→ Periodic Activities→ Calculate

Depreciation.

On the Fixed Asset tab, you can set a filter to select the assets you want to depreciate.For example: enter FA000130.

On the Options tab, enter the information shown in the following picture :

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Click OK to calculate the depreciation on 31/03/07

The batch job has calculated depreciation for fixed asset number FA000130and createdlines in the Fixed Asset G/L Journal window.

Click Fixed Assets, FA G/L Journals. The Fixed Asset G/L Journal window appears.

The batch job has calculated depreciation for fixed asset number FA 000130 andcreated lines in the Fixed Asset G/L Journal window.

The No. of Depreciation Days field has been filled in. When you run the batch job, theprogram calculates depreciation only over the number of days entered in this field. Theprogram will calculate the depreciation days.

The balancing line is created because the Insert Bal. Account field on the Options tab for the Calculate Depreciation batch job was selected.

To post the journal click Posting, Post.


To see the posted entries for FA000130, follow these steps:

To browse the card for asset number “FA000130”, c lick Fixed Assets, Fixed Assets.

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For single shift, the program calculates depreciation for 50days, and the denominator willbe 365.Calculated depreciation amount = 100000*10/100*50/365 = 1370

For double shift, the program calculates depreciation for 40 days, and the denominator will be as defined in the No. of Days Seasonal field in the Depreciation Book card.Calculated depreciation amount = 100000*20/100*40/180 = 4444

For triple shift, the program calculates depreciation for 100 days, and the denominator will be as defined in the No. of Days Season field in the Depreciation Book card.Calculated depreciation amount = 100000*30/100*100/180 = 16667

Force No of Days field in the calculated depreciation window has no relevance if the user has defined no of days in the Used No Of Days field in the ‘FA Shifts’ form in the FAcard.

Note 1:Depreciation will be calculated only if the FA posting date is greater than or equal to thedepreciation ending date in FA Shifts form. If the FA posting date is less than thedepreciation ending date, then you have to modify the depreciation ending date tocalculate the depreciation.

Note 2:In case of manual posting of depreciation amount through FA Journal or FA G/L Journalthe user has to select the FA Shift Line No. for the corresponding FA Shift Entry for which the Journal line has been made.

In Calculate Depreciation Process the FA Shift Line No. field is program generated andshould not be changed.

MONTHLY CALCULATION OF DEPRECIATION IN CASE OF SEASONAL / NONSEASONAL INDUSTRIES

For calculating the monthly depreciation in case of seasonal or non seasonal industries,the user has to define 12 lines for 12 months in the FA Shift form, because program willnot calculate depreciation on pro-rata basis in terms of Used No. of days.

Example 1

First Month - April

If the starting date of depreciation is 01/04/2006 and the depreciation ending date is30/04/2006 in Shifts form and 180 days has been defined as concern working days inNo. of Days Seasonal field in Depreciation Book Card.

While calculating Depreciation you have to define FA posting date as 30/04/06 incalculate Depreciation window.

The program will take the denominator as 180 days and numerator as 30 days.Book value is Rs. 50000 and Rate of Depreciation is 20%

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Calculation of Depreciation as per WDV.

50000*20/100 *30/180 = 1667. (Depreciation for April).

Second Month - May

If the starting date of depreciation is 01/05/2006 and the depreciation ending date is31/05/2006 in shifts form and 180 days has been defined as concern working days inNo. of Days Seasonal field in Depreciation Book Card.

While calculating Depreciation user has to define FA posting date as 31/05/06 incalculate Depreciation window.

The program will take denominator as 180 days and numerator as 31 days.

Book value is now Rs. 48333.Calculation of Depreciation as per WDV.48333*20/100 *31/180 = 1665. (Depreciation for May).

FA Reports

Navigation:Financial Management → Fixed Assets→ Reports→ Fixed Assets→ Depr.Schedule for Comp. Act


Field Comments Specify the Start Date with which you want

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Start Date the report to be generated (01/04/067)

End DateSpecify the End Date with which you wantthe report to be generated (31/03/07)

Click the Preview Button.

Calculation of Depreciation as per Income Tax Act

Navigation:Financial Management → Fixed Assets→ Setup→ Depreciation Books

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Depreciation Book Card


Fields CommentsBook Type

Select the book type as Income Tax. In thiscase all applicable rules for Income Taxwill be calculated for the depreciation book.

Depr. Threshold Days Define the threshold no of days where 50%of the normal rate is applicable. If the assethas been acquired during the year andasset has been put to use less than 180days then depreciation rate is 50% of thenormal rate.

Depr. Reduction % Define the reduction rate

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Note:The program checks the acquisition date and the starting date of depreciation in theFixed Asset card. If acquisition date and starting date fall in the same accounting periodthen the depreciation rate is 50% of the normal rate. If the acquisition date and startingdate of depreciation fall in different accounting periods then the system calculates thedepreciation rate as per normal rate

FA Classes

Navigation:Financial Management → Fixed Assets→ Setup→ FA Classes

Select the FA class code and click the block menu button to open the new window asfollows:

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Fields CommentsFA Class The program automatically inserts the

value in FA Class field.

Code Define the code for the Block, for example: Block1, Block2, and so on.

Description Define the description of the code fields

Book ValueDisplays the book value of the block. Theopening balance of the block can beentered through FA journal.Subsequently, at the time of addition or deletion of asset, the value automaticallygets updated in the book value field.There are two different conditions whenno depreciation is charged for the block:

The value in the Book Value fieldbecomes short term capital gain if the amount in Book Value field isless than zero and the number of assets existing in the block is oneor more than one.The value in the Book Value fieldbecomes short term capital loss if the amount in Book Value field ismore than zero and the number of assets existing in the block iszero.

Depreciation %Define the rate of depreciation for theblock.

Add Dep %Define the additional depreciation rate for the block. At present additionaldepreciation is applicable to only selectedplant and machinery block.

No. of AssetsThe program automatically calculates theNo. of Asset existing in the block.

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Accounting Period Income Tax

As per the Income Tax Act, accounting period is always April to Mach but it may bedifferent in the Companies Act. A user needs to create the accounting period ever year .

Navigation:Financial Management → Fixed Assets→ Setup→ FA Accounting PeriodsInc.Tax

Click the Create Year button to create a new fiscal year.


Fields Comments

Starting Date Define the starting date of the accountingperiod.

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No Of Periods Define the no. of periods for the accountingperiod.

Period Length Define the period of length, for examplemonth, quarter and so on.

Fixed Asset Card

For each fixed asset, user must set up a card containing information about the asset.

Navigation:Financial Managem ent → Fixed Assets→ Fixed Assets

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To create a Fixed Asset, fill the fields in FA Card as follows:

No. : FA000140 Description: Machinery 1Serial No.: M01 Add. Depr. Applicable : Place a check if you want to calculate Additional

Depreciation for the particular Asset. FA Class Code: Tangible

FA Sub class code: Machinery FA Location code: Prod.FA Block Code : Select the Block from look up button that has been created

in Block card. After selecting the Block it means that particular has been attached with the Block. (Block 1)

Depreciation Book Code: Income Tax FA posting Group: Machinery Depreciation Method: Straight-line Depreciation Starting Date: 01/04/06 Straight-Line %: 10.00 (The program will automatically insert the % from

Block card) .Book value: 1, 00,000

Book value will be affected after making Acquisition of Fixed Asset through FA Journal.

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To create a Fixed Asset, fill the fields in the FA Card as follows:

No. : FA000150 Description: Machinery 2 Serial No. : M02 Add. Depr. Applicable : Place a check if you want to calculate Additional

Depreciation for the particular Asset. FA Class Code: Tangible FA Sub Class Code: Machinery FA Location Code: Prod.FA Block Code : Select the Block from look up button that has been created

in Block card. After selecting the Block it means that particular has been attached with the Block. (Block 2)

Depreciation book code: Income Tax FA Posting Group: Machinery Depreciation Method: Straight-line Depreciation Starting Date: 01/11/06 Straight-Line %: 20.00 (The program will automatically insert the % from the

Block card)Book Value: 2, 00,000

Book value will be affected after making Acquisition of Fixed Asset through FA Journal.

Click Fixed Asset, Setup, FA Classes, and Blocks:

Now, see that the fields „Book Value and No. of Assets have been populated after creating FA card for Block 1 and Block 2.

Click the Assist button in the Book Value field to view the FA Ledger entries for theParticular Block (Block 1).

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Click the Assist button in the No. of Assets field to view the Fixed Asset list. You canview various types of assets attached with the particular Block (Block 1).


Navigation:Financia l Management → Fixed Assets→ Periodic Activities→ CalculateDepreciation

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On the Fixed Asset tab, set a filter to FA Class code as Tangible and FA Block Code asBlock 1.

You can also depreciate asset wise by mentioning the FA No.

On the Options tab, enter the information shown as follows:

Click the OK button to calculate the depreciation on 31/03/07. The batch job hascalculated depreciation for the block code Block 1 and created lines in the Fixed AssetJournal window.

Click Fixed Assets, FA Journals. The Fixed Asset Journal window Is displayed as shownbelow:

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The batch job has calculated depreciation for block number Block 1 and created lines inthe Fixed Asset Journal window.


Now calculate Depreciation for Block 2

Navigation:Financial Management → Fixed Assets→ Periodic Activities→ CalculateDepreciation

On the Fixed Asset tab, you can set a filter for FA Class Code as Tangible and FA BlockCode as Block 2.

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You can also depreciate asset-wise by mentioning the FA No.

On the Options tab, enter the information as follows:

Click OK to calculate depreciation on 31/03/07.The batch job has calculated depreciationfor the block code Block 2 and created lines in the Fixed Asset Journal window.

Click Fixed Assets, FA Journals. The Fixed Asset Journal window is displayed asfollows:

The batch job has calculated depreciation for block number Block 2 and created lines inthe Fixed Asset Journal window.

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To see the posted entries for Block 1 and Block 2, follow the procedure mentionedbelow:

Click Fixed Assets, Set Up, FA Classes, Blocks:

Block 1

See that the amount in Book Value field has been changed. Click the Assist button in theBook Value field to view the FA Ledger entries for the particular block (Block 1).

Depreciation has been calculated as follows:

Book value was Rs. 100000

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Depreciation Starting Date was 01/04/06 and FA Posting Date (DepreciationEnding Date) was 31/03/07

Asset has been put to use for more than 180 days

Depreciation calculated is 100000*30/100 = 30000 (10% normal depreciation rateand 20% additional depreciation rate)

Block 2

Depreciation has been calculated as follows:

Book value was Rs. 200000Depreciation Starting Date was 01/11/06 and FA Posting Date (DepreciationEnding Date) was 31/03/07

Asset has been put to use for less than 180 days

Depreciation calculated is 200000*20/100 = 40000 (10% normal depreciationrate and 10% additional depreciation rate)

You can view the posted entries from Fixed Asset card for the particular Asset.

Note 1 : In Block 2 you have mentioned 20% normal depreciation rate and 20%additional depreciation rate, but the program calculates depreciation with 50% of rateof normal and additional depreciation rate. This is because the asset has been put touse for less than 180 days.

Note 2 : If the particular asset has been put to use on any day of the subsequentyear, then full rate of normal and additional depreciation will be applicable.

Note 3 : Additional depreciation is allowed only once and that too in the previousyear in which the eligible asset is put to use and the asset has been acquired andinstalled after 31.03.05.

Note 4 : Additional depreciation allowed shall be deductible while computing theWDV for the next year.

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Note 5 : If the Book Value of the block becomes negative and no. of assets decreaseto zero, then the program will not calculate any depreciation for the particular block.

Note 6 : The program will not restrict the calculation of depreciation on a monthly (or other periodicity) basis as per Income Tax Act because periodic depreciation mayhelp in computation of the advance tax of the assessee. If any asset of a block hasbeen sold on which monthly depreciation has already been posted; then the systemwill give an appropriate error message and will not allow posting of that asset until alldepreciation entries for that year have been cancelled for that block. However, it isadvisable not to calculate the depreciation on a monthly basis as per Income Tax

Act.

Note 7 : If the asset has been acquired and put to use in the same year andappreciation has been made to the asset after 180 days of a financial year, then anappreciation amount of 50% of the normal rate is applicable .If the appreciation hasbeen made before 180 days of a financial year, then on an appreciation amount 100% of the normal rate is applicable.

If the appreciation has been made before 180 days of a financial year when assethas been acquired and put to use, then the user has to follow the standardprocedure by posting the FA Journal by giving the FA Posting Type as Appreciation.

If the appreciation has been made after 180 days of a financial year when asset hasacquired and put to use for more than 180 days, then the you have to follow thesteps.

Step-1: Open a new FA Card; Book value will be affected after making Acquisition of Fixed Asset through FA Journal.FA No: 01

Acquisition cost Rs.100000 Acquisition date: 01/04/06Starting date of depreciation: 01/04/06

Step-2: Open another FA Card; Book value will be affected after making Acquisition of Fixed Asset through FA Journal.FA No: 02

Acquisition cost Rs.50000 Acquisition date: 01/04/06Starting date of depreciation: 30/11/06Take Appreciation as Acquisition, and define start date of depreciation asappreciation date.

Step-3: Attach both the assets – FA 01 & FA 02, with Block 01.

Step-4: Run the batch job for calculating depreciation for Block 01.

Step-5: The program will calculate depreciation with 100% rate of depreciation for FA01, and with 50% rate of depreciation for FA 02.

The FA posting date is now 31/03/07 (last day of a financial year).

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Step-6: On 01/04/07 (starting day of new Financial year), you will reclassify FA 02 toFA 01 through FA reclassification journal.

After reclassification, the program will transfer all the book values includingacquisition cost and depreciation amount from FA 02 to FA 01.

Step-7: Notice that FA 02 now has a zero book value.

Step 8: On 01/04/07, you will dispose FA 02 with zero amount through FA journal.

Note 8 : In case of Income tax Act, if user has selected User-Defined as Depreciationmethod the system will not calculate Depreciation. By selection User-Defined systemwill give error messageDepreciation Method must not be User-Defined in FA Depreciation Book FA No. ='',Depreciation Book Code='INCOMETAX'.

Enter an Opening Balance : If you are entering the opening balance of thefixed asset as per Income Tax Act for the first time, then you have to follow some stepswhich (steps) can be understood through an example.

Example: You want to enter an opening balance on 01-04-2007 then you have to:Open accounting period for the years 2006-07 and 2007-2008 in the AccountingPeriods Inc Tax

Acquire the asset through FA Journal as on 31-03-2007 in the accounting period2006-07Enter “31/03/2007” in FA Posting Date field Select FA number and depreciation book code from the look up listSelect FA posting type as “Acquisition Cost” from the drop down box Enter the amount of opening balance in the Amount fieldPost the FA JournalEnter “01/04/2007” in the Depreciation Starting Date field of FA card

FA Reports

Navigation:

Financial Management → Fixed Assets→ Reports→ Fixed Assets→ Depr.Schedule for IT Act

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Fields CommentsStart Date

Specify Start Date that should be used togenerate the report (01/04/06)

End Date Specify End Date that should be used togenerate the report (31/03/07)

Click the Preview button.

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Appendix

As per Companies Act

Example 1:

Annual depreciation:Straight Line Method:If a machine cost Rs. 1, 20, 000 on 1/1/2006 assuming the accounting year ends on 31December and the rate of depreciation is prescribed for SLM as 4.75%.

Year Computation AnnualDepreciation

AccumulatedDepreciation

BookWrittenDownValue

1 120000x4.75% 5700 5700 1143002 120000x4.75% 5700 11400 1086003 120000x4.75% 5700 16100 1029004 120000x4.75% 5700 21800 97200

Written Down Value Method: Assume rate of depreciation prescribed for WDV as 15%.


AccumulatedDepreciation

Book WrittenDown Value

1 120000x15% 18000 18000 1020002 102000x 15% 15300 33300 867003 86700x15% 13005 46305 736954 73695x15% 11054 57359 62641

Example 2:

Monthly Depreciation:Straight Line Method:

The machine cost Rs. 1, 20,000 on 1/1/2006 assuming the accounting year ends on 31December and rate of depreciation is prescribed for SLM as 4.75%.

Year Computation Annualdepreciation

Monthly Depreciation BookWrittenDownValue

January 120000x4.75% 5700 120000x4.75%x31/365=484* 119516February 120000x4.75% 120000x4.75%x28/365=437* 119097March 120000x4.75% 120000x4.75%x31/365=484* 118595

April 120000x4.75% 120000x4.75%x30/365=469* 118126May 120000x4.75% 120000x4.75%x31/365=484* 117642June 120000x4.75% 120000x4.75%x30/365=469* 117173

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Written Down Value Method: Assume rate of depreciation prescribed for WDV as 5%.


Monthly Depreciation BookWrittendownvalue

January 120000x15% 18000 120000x15%x31/365=1529 118471February 120000x15%x28/365=1381 117090March 120000x15%x31/365=1529 115561

April 120000x15%x30/365=1479 114082May 120000x15%x31/365=1529 112553June 120000x15%x30/365=1479 111074

Pro-rata depreciation on purchase and sales of Purchase of Asset:

Pro-rata depreciation should be calculated for the number of calendar days in a year andtaking year duration for 365 days /366 days in case of leap year.

Example 3:

Purchase Scenario:XYZ limited purchase a machinery of Rs. 2, 50,000 on 1 November 2005. The rate of depreciation is 10%. The XYZ limited closes their account on 31 March every year.

As per companies act, the depreciation should be computed as under: -

Asset Acquired OriginalCost

Depreciationfor Number of Days

DepreciationRate

Depreciation Amount

Machinery 1.11.2005 2,50,000 151 10% =2,50,000x10%x151/365 = 10342

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Sales Scenario :XYZ Limited sold machinery Rs. 2, 50,000 on 15 August 2005. This machinery waspurchased on 1/4/2005. The rate of depreciation is 10%. XYZ limited close their accounton 31 March every year.

Asset Acquired Originalcost

Date of Sales

Depreciation for number of Days

Depreciationrate

Depreciation amount

Machinery 1.04.2005 2,50,000 15.08.2005 137 10% =2,50,000x10%x137/365 =9384

Combined scenario of Purchase and Sales:Larsen Ltd. closes their accounts on 31 March 2006 every year. They purchased themachineries as follows:

1. Purchased the machineries (R) costing Rs.1,20,000 on 1/07/20032. On 1/01/2004 some machineries (s) were purchased costing

1,20,0003. On 1/10/2004 again purchased some machinery (T) costing Rs.

200004. On 1/01/2005 purchased a new machinery (U) for Rs. 60,0005. One machinery (Q) costing Rs. 40,000, which was purchased on

1/7/2003 was sold for Rs. 12000 on 1/10/2005.6. They charged depreciation @ 33.33% on the Written Down Value

Method.

Machinery Acquired Originalcost

2003(depreciation)

2004(Depreciation)

2005

Machinery-(R )

1-07-2003 1,20,000 1,20,000x33.33%x275/365=30133

Machinery(S)

1-01-2004 1,20,000 1,20,000x33.33%x91/365 =9972

Total 2,40,000 40105 (2,40,000-40105=199895x33.33%)=66625

Machinery(T)

1-10-2004 20,000 20,000x33.33%x182/365=3324

Machinery(u)

1-1-2005 60,000 60,000x33.33%x91/365=4986

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Machinery(Q)

1-7-2003 40,000 40,000X33.33%X275/365=10044

(29956X33.33%)=6696

23260 x33.33%x183/365 =3887

Total 80,000 40105 74935 (3,20,000-40105-35048)=244847-23260x33.33%=73855

Example 4:Depreciation computation for Seasonal Industries:

A sugar industry started crushing on 1/10/2005. The mill was running on three-shiftbasis. The new milling machinery worth of Rs. 5, 00,000 was installed on 1/11/2005.The company closed the plant on 15 March 2006 due to scarcity of cane. Thedepreciation rate for triple shift is prescribed @15% p.a on Written Down Value Method.Mill closes their books on 31 March every year.


Duration of year (Seasonalindustry 180or actualwhichever ishigher)

Depreciationfor number of Days

Depr eciationrate

Depreciationamount

MillingMachine

1-11-2005 5,00,000 180 151 15% =500,000x15%x135/180=56250

Depreciation computation for other industries:

M/S Suba Pharmaceuticals were running their plant on double shift basis. They have tostop there production on 15/10/2005 due to scarcity of raw material. They cold notoperate the plant till 31 March 2006. The opening balance of machinery on 1/04/2005was 4, 00,000. The rate of double shift depreciation is 7.55% p.a. on Written DownValue Method.


Duration of year (Other industry240 or actualwhichever is higher)

Depreciationfor number of Days

Depreciationrate

Depreciation amount

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MillingMachine

01-04-2005 4,00,000 240 198 7.55% =400,000x7.55%x198/240=24915

As per Income Tax Act

Example 1:Computation of Written down value & Depreciation:X owns the following assets as on 1/4/2006:

Asset Rate of Depreciation (%) Written down value ason 1.04.2006

Building A 10 10,20,000Building B 10 5,40,000Building C 10 6,35,000Building D 5 2,60,000

Building E 5 3,10,000Machinery A 15 60,000Machinery B 15 1,82,000Machinery C 30 1,65,000Machinery D 30 4,000Machinery E 30 50,000Furniture A 10 1,10,000Furniture B 10 8,000

The following assets are acquired during the previous year 2006-07

Asset Rate of Depreciation (%) Actual cost Date of acquisition

Building F 10 5,40,000 14-5-2006Machinery F 15 1,12,000 15-5-2006Machinery G 15 4,000 16-7-2006Machinery H 15 62,000 21-9-2006Machinery I 30 16,000 21-9-2006Patents 25 40,000 15-4-2006Technical Know-how 25 60,000 17-5-2006

The following assets have been sold during the previous year 2006-07

Asset Sale Consideration Date of saleMachinery C 1,10,000 2-9-2006Building D 4,00,000 21-10-2006Machinery E 80,000 28-03-2007

Determine the depreciation for the assessment year 2007-08

Computation of Depreciation:

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Particulars WDV as on

1-04-2006 Additionsduring theyear

Assets soldduring theyear

WDV as on31-3-2007

Depreciation

Block 1Building10%

21,95,000 5,40,000 0 27,35,000 2,73,500

Block 2Building 5%

5,70,000 0 4,00,000 1,70,000 8,500

Block 3Machinery15%

2,42,000 1,78,000 0 4,20,000 63,000

Block 4Machinery30%

2,19,000 16,000 1,90,000 45,000 13,500

Block 5Furniture &Fixtures

1,18,000 0 0 1,18,000 11,800

Block 6Intangible

Assets

NIL 1,00,000 0 1,00,000 25,000

Total 3,95,300

Example 2:Written down value of four machines at the beginning of the previous year 2006-07,forming part of a block of assets carrying 15% rate of depreciation was Rs.5,50,000,which includes Rs. 50,000 of machine which is acquired on 5.1.2006 but put touse on 14-1-2007. The following four machines of the same block were bought asfollows:

Machinery Date of Purchase Date when put touse

Cost (Rs.)

Q 5-4-2006 15-5-2006 1,00,000R 15-5-2006 31-1-2007 2,00,000S 15-11-2006 27-3-2007 1,50,000T 15-5-2006 03-04-2007 2,00,000

Four machines of this block (other than those that were acquired and put to use for lessthan 180 days) were sold for Rs. 4, 00,000.

Computation of Depreciation on 31/3/2007:(a) WDV at the beginning of the year 5, 50,000

Additions during the year in the same block(i)Machinery Q acquired and put to use for 180 days or more 1, 00,000(ii) Machinery S acquired and put to use for less than 180

days and machinery R although acquired in the previousYear for a period exceeding 180 days but put to use for less than 180 days.(2,00,000+1,50,000) 3,50,000 4,50,000

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Total 10, 00,000Less: Assets sold during the year 4, 00,000WDV on which depreciation is to be charged 6, 00,000Depreciation:On Rs. 2, 50,000 @ 15% 37,500On Rs, 3, 50,000 @ 7.5% 26,250 63,750

Written Down value at the end of the year 5, 36,250

Example 3:R Ltd. has started a new business of manufacturing paints on 1/04/2006. The companyhas purchased the following assets during the financial year 2006-07:

Asset Actual cost of acquisition

Date of Purchase

Rate of Depreciation

Date onwhich theasset is putto use

Furniture 2,00,000 10-04-2006 10 10-4-2006 Air-Conditioner installed inoffice

1,00,000 16-06-2006 15 18-6-2006

Car 8,00,000 12-7-2006 15 12-7-2006Plant-X 50,00,000 11-4-2006 15 28-04-2006Plant-Y 20,00,000 15-9-2006 15 16-11-2006Plant Z 80,000 1-08-2006 100 15-09-2006Computer for office

1,00,000 1-07-2006 60 1-07-2006

Computer for factory

1,50,000 2-7-2006 60 4-07-2006

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Computation of Depreciation and Additional Depreciation:

Furniture (10%) Plant (60%) Plant & Car (15%)

Plant (100%)

Opening WDVas on 1-4-2006

NIL NIL NIL NIL

Add: Actual costof assetsacquired duringthe year

2,00,000 2,50,000 79,00,000 80,000

WDV as on 31-3-2007

2,00,000 2,50,000 79,00,000 80,000

Less : NormalDepreciation

20,000 1,50,000 10,35,000* 80,000

Less: Additionaldepreciation**

NIL 30,000 12,00,000 NIL

WDV as on 1-04-2007

1,80,000 70,000 56,65,000 NIL

Normal Depreciation on Plant (15%) has been calculated as under :(1) Depreciation @ 15% on 59,00,000 8,85,000(2) Depreciation @ 7.5% on Rs. 20,00,000 1,50,000

10, 35,000** Additional depreciation has been calculated as under:

Plant X Plant Y Plant Z Computer for factory

Other Assets

Actual Cost 50,00,000 20,00,000 1,50,000Rate of

AdditionalDepreciation

20% 10% NIL 20% NIL

AdditionalDepreciation

10,00,000 2,00,000 NIL 30,000 NIL

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Microsoft ® Dynamics –Nav ® 4.0 IN SP1-Direct Debit to PLA.

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TABLE OF CONTENTS

Personal Ledger Account (PLA) ...................................................................................... 3Direct Debit to PLA: ....................................................................................................... 3

Setup ............................................................................................................................... 4Transactions: ................................................................................................................... 5Sales Orders : .............................................................................................................. 5Sales Invoices ............................................................................................................ 15General Journals ........................................................................................................ 16

Reports: ......................................................................................................................... 19PLA Excise No. Series .............................................................................................. 19Sales Invoice ............................................................................................................. 20E.R.-1 ........................................................................................................................ 21

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Personal Ledger Account (PLA)

PLA is the record of amount deposited by the manufacturer with the excise authorities inadvance for payment of excise as and when, the manufacturer clears goods; he will debit thePLA by the amount of duty payable on those goods. Each debit and credit entry must bemade on separate line and assigned a running serial number for each financial year.

Only one entry, either debit or credit, can be made against one serial number. When theassessee deposits any amount with the Central Excise authorities for payment towardsexcise duty, he must make a credit entry in the PLA. At the time of removal of excisablegoods assessee pays the duty determined by him by making a debit entry in the PLA. Thebalance remaining at a given point of time is the amount available for future payment of excise duty. If any goods are removed from the factory without such debit entry or without

adequate credit balance in the PLA, they will be treated as goods removed without paymentof duty. Generally, corrections are not allowed in PLA. If any corrections become necessary,the original entry must be neatly scored and attested by the assessee or his authorizedagent.

Direct Debit to PLA:

When inputs or capital goods on which Cenvat Credit is taken are removed as such from thefactory, the manufacturer of final product has to pay an ‘amount’ equal to Cenvat Creditavailed on inputs/capital goods at the time of receipts . If they are removed after processing from the factory the manufacturer has to pay an amount of Excise Duty as computed at thetime of removal. Both can be done by debiting the Personal ledger Account (PLA).

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SetupFinancial Management → Setup → Excise → Excise No. Series List

Define a separate Number Series for each E.C.C. No. such that PLA entry no. for eachPLA gets generated based on the defined series

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Transactions:

Sales Orders :

1. Sales and Marketing → Order Processing → Orders

a) Create a new Sales Order for a customer. Select excisable item on the linelevel and fill in all the line details. Select the excise structure and calculatestructure values for the line items.

b) Checkmark the field “Direct Debit to PLA ” if the Excise amount of theselected line has to be Directly Debited to PLA.

c) Direct Debit to PLA field is available through „Show Column on salesdocument sub form.

d) “Direct Debit to PLA” is applicable for sales of items and Fixed Assets.

Goods removed as such

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If goods are “removed as such ” ( i.e. without any further processing/manufacturing afterbeing purchased) then the following excise amount field s can be selected from „ShowColumn on Sales Document sub form and can be edited: BED Amount, AED (GSI)Amount, AED (TTA) Amount, SED Amount, SAED Amount, Cess amount, NCCD

Amount, eCess Amount, ADET Amount, ADE Amount.Enter the Excise amounts paid at the time of purchase of the same if the excise amount isdifferent. Normally the values in these fields should not be changed.

e) Click on Function-> Direct Debit to PLA

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f) Following form will be opened. Enter the fields under column PLA with theExcise Amounts allocation duty wise. (All other Fields are not editable). Thetotal of the Excise amount entered in these fields should be equal to the total

of Excise Duty Payable amount .Close the form after allocations.

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h)

Ship and Invoice: Do the “Ship and Invoice” for the Order.

i) Go to Sales and Marketing → History → Posted Invoices

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h) Click on “Navigate” Button . Following screen will be displayed

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i) Please note that PLA entries are created.Debiting the Excise Payable and crediting the PLA.

j) The GL Entry table will show following entries

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Thus the Excise amount will be Directly Debited to PLA and an entry will begenerated in PLA Entry Table. The „PLA Entry No. field will be populated with thenumber generated from the E.C.C. No. & Type combination of Excise No. Series

table:PLA entry No is a new field in the PLA Entry Table.The „PLA Entry No. would also be populated on Posted Sales Invoice Header.In the sales invoice report the PLA Entry No is displayed. Screen shot is shown in thelast page.

During the process of Pay Excise from General Journal and while payment of Excise duty through PLA then also the PLA entry No. is populated in the PLAEntry Table based on the No series as defined in the Excise No Series table..

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Sales Invoices

a) Do the standard steps for creation of sales invoice.b) Check the field “Direct Debit to PLA” if the Excise amount of the selected

line has to be directly debited to PLA

c) Follow the steps of “Sales Order “except for Ship and Invoice.

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General Journals

a) Periodic Settlement of Excise Duty Payable: Financial Managemen t → GeneralLedger → General Journal. For Periodic Settlement of the line transactions for whichDirect Debit to PLA is unchecked in Sales Order/ Invoices along with other SalesOrders /Invoices.

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b) Click on “Functions” -> “Payments → Excise” The Invoices which have Excise Amount Payable will appear for the purpose of periodicsettlement.

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c) Click on button “Apply Entries”. The following screen will appear.

d) Enter the “Excise Payable” amount in the relevant fi elds viz RG 23 A, RG 23 C, PLA.

Note : The amount of excise payable will not include the Direct Debit to PLAtransactions.

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Reports:

PLA Excise No. Series

Financial Management → Reports → Excise Reporting → PLA Excise No. seriesThis Report will be generated ECC No. wise and Month wise and will show the PLAEntry No. of various entries.

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E.R.-1

The following new features have been added in the E.R.-1 Report:

1) „Excise Prod. Posting Group, Unit wise grouping so that the system showsdifferent unit of measures under same chapter heading.

2) Another section added for „Removed As Such goods (The goods which areremoved without any Manufacturing/Processing). In case of Removed AsSuch for a given Unit & Excise Prod. Posting Group this section isdisplayed

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Microsoft ® Business Solutions –Navision ® 4.0- Indian Value Added Tax

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Table of ContentsOverview of Functionality ...................................................................................... 4

Detailed Setup ................................................................................................... 4 Comprehensive Functionality ............................................................................ 5 Reports .............................................................................................................. 5

Definitions ............................................................................................................. 6 Value Added Tax (VAT) .................................................................................... 6 Input VAT .......................................................................................................... 7 Output VAT........................................................................................................ 7 Input VAT Credit ................................................................................................ 8 Input VAT Credit on Capital Goods ................................................................... 8 Input VAT and Input VAT Credit ........................................................................ 8 VAT Rounding Off ............................................................................................. 9 VAT Setoff and Carry Forward .......................................................................... 9 Inter State Purchases, Sales, and Branch Transfers ......................................... 9 Exports, Deemed Exports, and Supply to EOU Units ........................................ 9

Composition Scheme ........................................................................................ 9 Lease Transactions ......................................................................................... 10 Debit Notes/ Credit Notes ................................................................................ 10

Adjustments in TAX Credit Due to Changes in Usage .................................... 10 Adjustments in TAX Credit Due to Goods Lost / Destroyed or Consumed ...... 10

Setup- Sales Tax (Value Added Tax) .................................................................. 11 Schedules........................................................................................................ 11 States .............................................................................................................. 13 Deferment Period ............................................................................................ 14 Schedule ......................................................................................................... 16 Forms .............................................................................................................. 17

TAX Jurisdictions ............................................................................................. 18 Tax Details ...................................................................................................... 19 Company Information ...................................................................................... 20 Location Card .................................................................................................. 22 Customer Card ................................................................................................ 23 Vendor Card .................................................................................................... 24 Item Card......................................................................................................... 25

Calculation of Input VAT on Item ........................................................................ 25 Viewing the Ledger Entries.............................................................................. 27

Calculation of VAT on Capital Goods. ................................................................. 30 Viewing the Ledger Entries.............................................................................. 33

Calculation of VAT if the Vendor has opted Composition Scheme ..................... 36 Viewing the Ledger Entries.............................................................................. 37

Calculation of Retention Limit on VAT. ............................................................... 40 Viewing the Ledger Entries.............................................................................. 41

Calculation of Vat able Purchase Tax on CST .................................................... 45 Viewing the Ledger Entries.............................................................................. 46

Calculation of VAT if Purchases are meant for Export or Deemed Export .......... 49 Purchase Credit Memo. ...................................................................................... 49

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Overview of Functionality

VAT functionality comprehensively covers the Indian VAT scenario. This functionality isa standard solution for the States / Union Territories (UT) that have implemented or areimplementing VAT in India. This functionality provides a common solution for the

requirements under all Indian States / UTs VAT Acts.

Detailed Setup

VAT functionality contains a detailed setup, which will used in mapping the Tax rate,calculation of Input VAT Credit, Output VAT, VAT Adjustments, and the VAT Settlementprocess.

Setup Area DescriptionT.I.N. Nos. Various TIN Nos. of the firm are defined.

States

State/UT, first two-digits of the TIN of theState, Deferments for the Capital Goods,Schedules of the State, Specified Periodfor Refund, Tax Period, Retention Limitincase of Branch Transfer, GL account for Input VAT credit, GL account for OutputTax, GL account for VAT Deferred

Account, GL account for VAT payable Account, GL account for VAT Refund, andGL account for Excess Input VAT CreditCarried forward are defined.

Tax GroupsItem Categories and the Item category,which is a Works contract, are defined.

Tax Jurisdictions

Tax Jurisdiction, the State under which itfalls, Tax Type, Retention Limit for NonTaxable Sales and whether this retentionlimit is loaded on the item are defined.

Tax details

Tax Jurisdiction and the Item Category, theSchedule, Tax Rate, Capital Good,Creditable Good, Standard Deduction,VAT able Purchase Tax, VAT retentionlimit are defined.

Schedules All Schedules for States are defined.

Tax Area LocationsTax jurisdiction applicable for Customer/Vendor State with the Location is defined.

Item Card If the item is fixed asset, and the TaxGroup code for the item are defined.

Vendor Card TIN No of the Vendor and whether optedfor Composition is defined.

Customer CardTIN No of the Customer and whether theSale to customer is Export/ DeemedExport Sale or VAT Exempted Sale are

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defined.

Location CardTIN No of the Location, Location under composition and Export/ Deemed ExportLocation are defined.

GL Account Card Tax Group Code is defined

Comprehensive Functionality

VAT setup maintained into the system comprehensively covers the following, in cases of Normal items, Capital Goods and GL (Leases):

Computation of Input VAT/ CSTComputation Input VAT-able Purchase TaxComputation of Input VAT Credit taking care of retentions for items andnon-taxable sales and retentions for items purchased for execution for works contactsComputation of Output VAT/CSTVAT Reversals/ Adjustments in the cases of Changes in Usage,Lost/Destroyed, Branch Transfers, Non-Business Consumption (with theapplicable retention) and Credit NotesVAT Setoff / Settlement processVAT Refund in case of Excess Input Vat Credits carried forward, CurrentInput VAT credit, and Input VAT credit for the goods exportedRefund claimed (if any) with respect to the Excess Input VAT Creditscarried forward and Current Input VAT Credit are checked/ monitored withregard to the specified period for refunds applicable in state VAT Act.Financial and VAT entries

Above mentioned cases are specific to States and handled accordingly.

Reports

The fundamental VAT reports like Sales Register, Purchase Register, Tax Invoice, Intra-State Purchases and Sales, Inter-State Purchases and Sales, Deferment Schedule, VATPayable Carried Forward A/C, VAT Deferment Account, and VAT Settlement have beencovered and VAT rounding off has been taken care of.

The information required for the VAT returns for the states has also been provided.

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Definitions

Value Added Tax (VAT)

Value Added Tax (VAT) is the tax on the value addition.

Invoice method is followed in India for the Value Addition Tax, where in the input tax paidon all the inputs and capital goods used in production, manufacture or process of taxableoutput is allowed as input VAT credit.

.

Base Price

Base price is the base value of the item on which the VAT rate is applied to get inputVAT or output VAT.

Input VAT

VAT paid or payable by a purchasing dealer to the selling dealer or the VAT able entrytax / purchase tax paid or payable is defined as input VAT.

Input VAT Credit

Credit available on the input VAT paid / payable on purchases.

Composition Scheme

Presumptive Compounded Tax

VAT Dealer

Dealer, registered under the VAT Act is defined as VAT dealer.

Input VAT Credit Reversal

Reversal of input VAT credit due to change in usage, destruction, loss, sale of capitalgoods, transfer, and so on is defined as input VAT credit reversal

Output VAT (Capital Goods)

VAT payable on sale of capital goods is defined as output VAT.

Vat Credit Receivable (Capital Goods)

Input tax credit (capital goods) available for set off in current period is defined as VATcredit receivable .

Vat Credit Deferred (Capital Goods)

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Input tax credit (capital goods) available and deferred for set off in next periods has beendefined as VAT credit deferred.

VAT able Purchase Tax

Taxes other than VAT which are VAT able known as VAT able purchase tax.

Capital Goods

Fixed assets which are capital goods and not in the negative list as defined under respective State VAT Law where purchase of asset was made.

Taxable Turnover

The turnover which is considered for calculating input VAT credit is defined as taxableturnover .

Total Turnover

Total Turnover is defined as aggregate of sale prices of all goods including thetransactions if any.

CST Sale

Inter state sale covered under CST act is defined as CST sale.

Out VAT

Tax payable by a registered dealer on the sale of goods effected

Tax Period

Tax period is either a calendar month or any other period as may be prescribed under the State VAT Act for filing the returns to the tax authority

Input VAT

VAT paid on local purchases, means within the same state, is defined as input VAT. A

percentage of the input VAT will be available as credit.

Output VAT

VAT payable on sales/ transactions to the customers in the same state is defined asoutput VAT.

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Input VAT Credit

The part of input VAT and VAT able purchase tax that can be used in the settlementprocess is called input VAT credit.

Input VAT credit is available on the input VAT and on the VAT able Purchase tax paid /payable on the purchase of goods to the state. These purchases are from the registereddealer under the respective State VAT Act, who has not opted for the compositionscheme and items intended for the purpose of:

Sale or resale inside the stateUse as raw material or as capital goods in manufacturing and processing of taxable goodsSale in course of export out of territory of India.Inter state trade or commerce.

Input VAT Credit on Capital Goods

Input tax credit on capital goods will be available for traders and manufacturers.Input VAT paid on capital goods will be eligible for tax credit; the same will be adjustedover a period depending on the State (a maximum of 36 equal monthly installments).

Input VAT and Input VAT Credit

The available input VAT credit will be based on the usage of Inputs/ Capital Goods in the

taxable and non taxable turnover:USAGE INPUT VAT CREDITTaxable Turnover Full Input VAT CreditNon Taxable Turnover No Input VAT CreditCommon Usage Input VAT Credit =

Input VAT x (Taxable Turnover/ TotalTurnover)

For VAT in Maharashtra:1. Partial Input VAT Credit for non taxable turnover 2. Partial Input VAT Credit on fuels

In both of the above cases, retention would be 4% of the purchase price.

1. Partial Input VAT Credit for non taxable turnover can be arrived as under Input VAT Credit = (Input VAT – Retention amount) + (Retention Amount

x (Taxable Turnover/ Total Turnover))

2. Partial Input VAT Credit on fuels can be arrived as under Input VAT Credit = (Input VAT – Retention amount) x (Taxable Turnover/

Total Turnover)

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VAT Rounding Off

Any sum payable by the dealer under the VAT Act shall be rounded off to the nearestrupee value. Therefore, if any amount of tax containing a part of rupee consisting of paise for example: 50 paise or more, then it will be increased to the nearest rupee that is

to Rs. 1, and if such part is less than 50 paise, it will be ignored.

VAT Setoff and Carry Forward

Input VAT credit amount in relation to any Tax period will be set off against the amountof the Output VAT of the Tax Period.

If the input VAT credit exceeds the output VAT in a tax period, then the excess credit willbe carried over to the next period. Input VAT credit would be carried up till the end of the specified period and excess unadjusted input VAT credit at the end of specifiedperiod, if any, would be used for refund.

The specified period and the tax period depend on a particular State.

Inter State Purchases, Sales, and Branch Transfers

Inter State transactions do not come under the purview of State VAT Act. They fall under the purview of CST Act.

Purchases: Tax paid on inputs procured (purchases) from other states through inter-state sale will not be used for credit.

Sales: The output tax payable will be CST and input VAT credit can be used to set off against the CST payable

Branch Transfers: Transfer will get input tax credit to the extent of input VAT paid inexcess of 4% if supported by „F form . Transferee will not get any input VAT credit.

Exports, Deemed Exports, and Supply to EOU Units

Export Sales, Deemed Exports, and supply to EOU units will not come under thepurview of State VAT Act. They are considered as zero-rated sales and the input VATcredit is available on the inputs used in these sales.

Input VAT credit can be adjusted against output VAT (if any) or refunded in full.

Composition Scheme

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Small dealers with annual gross turnover not exceeding the limit, fixed up by therespective State, who are otherwise liable to VAT, shall have an option for a compositionscheme where the tax is paid as a small percentage of the gross turnover.

No input VAT credit is available to such dealer and the purchases from them will not beconsidered for input VAT credit.

Lease Transactions

Lease does not involve transfer of title in goods at the time of transaction and involvesonly right to use an asset for defined period of time. Some State VATs have includedlease rentals in sales and output VAT as payable. The output VAT will be on the leaserentals.

Debit Notes/ Credit Notes

When VAT dealer has been issued a credit note or debit note on goods purchased, thetax credit account and the goods cost would be adjusted for the amount.

Adjustment will be based on the time of receipt of Debit Notes or Credit Notes; the timehere is specified by the State VAT Act.

Adjustments in TAX Credit Due to Changes in Usage

In cases of changes in the expected usage and actual usage of goods for taxable andnon taxable turnover, input VAT credit claimed in respect of such purchases will bereduced or increased (as the case may be) in the tax period during which the change inusage takes place.

Adjustments in TAX Credit Due to Goods Lost / Destroyed or Consumed

In case where any goods or goods manufactured on which the input VAT credit havebeen claimed, are lost or destroyed; the input VAT credit would be reversed on suchgoods in the tax period in which goods are claimed to have been lost or destroyed. Theamount of reversal shall be state specific.

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NAVIGATION :F INANCIAL M ANAGEMENT → S ETUP → S ALES T AX→S CHEDULE

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Define the schedules under the State VAT Act. This form acts as a list form for selectingthe schedule in the tax details.

States

NAVIGATION :

Financial Management →Setup →Sales Tax→ States

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Field Comment

State Code for TIN Define the state code used in the TIN Noof the state.

Tax Account (Sales) Select the GL account of the out tax withrespect to the state.

Tax Account (Purchases) Select the GL account of the input VATcredit with respect to the state.

VAT Deferred Account No. Select the GL account of the VAT deferredaccount with respect to the state.

VAT Payable Account No. Select the GL account of the VAT or CSTpayable account with respect to the state.

VAT Refund Account No. Select the GL account of the VAT refundaccount with respect to the state.

Excess Credit C/F Account No Select the GL account of the CarriedForward Excess Vat Credit with respect tothe state.

Branch Transfer Retention Define the percentage of the retention onthe base value above which the input VATcredit is available when branch transfer occurs from the state of the location.

Tax Period Define the tax period of the respectivestate.

Specified Period for Refund Define the specified period according tothe state VAT act after which the refund of the Excess Vat Credit Carried Forwardcan be applied for refund.

Deferment Period NAVIGATION :Financial Management →Setup →Sales Tax→ States→ Deferment Period

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Field Comments

State The state, for which the deferment is

defined, gets automatically populated withthe reference to the cursor placed in theState form at the time of selecting thedeferment period from the state button.

Effective Date Define the date from when the thresholdand the deferments are applicable.

Starting Threshold Amount & Closing Define the threshold range for which a

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Field CommentsThreshold Amount separate deferment is applicable and the

effective date.

No of Deferments Define number of deferments for thethreshold and the effective date.

Schedule

NAVIGATION :Financial Management →Setup →Sales Tax→ States→ Schedule

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Field CommentsSchedule Select the schedules for the state

Forms

NAVIGATION :Financial Management →Setup →Sales Tax→ States→ Forms

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Fill in the field according to these guidelines:

Field Comments

Forms Select the form applicable for the state

TAX Jurisdictions

NAVIGATION:Financial Management →Setup →Sales Tax→ Tax Jurisdictions


Field Comments

Tax Type Define the type of tax whether it is VAT or CST with respect to tax jurisdiction.

State Define the state of the tax jurisdiction.

VAT Retn Limit % of ITC NTS Define the VAT retention limit percentageon the Non taxable sales for the

jurisdiction. VAT retention is calculated onbase price of the Item.

VAT Retn Limit loaded on Item A check mark in this field shows that VATretention is loaded on Item. The VATretention is calculated on the input VATamount.

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Field Comments If VAT retention limit percentage on thenon taxable sales is defined for the tax

jurisdiction with the VAT Retn Limit loadedon Item field unchecked, the difference of Input VAT and the retention will beavailable for input VAT credit and theretention amount is available for Input VATcredit based on the usage in Non TaxableSales.

If VAT retention limit percentage on theNon Taxable Sales is defined for the TaxJurisdiction VAT Retn Limit loaded on Itemfield checked, the difference of input VATand the retention will be available for inputVAT credit based on the usage in NonTaxable Sales and the retention amount isloaded on the Item.

Tax Details

NAVIGATION :Financial Management →Setup →Sales Tax→ Tax Details


Field Comments

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Field Comments Schedule Select the schedule of item category in the

tax jurisdiction

Capital Goods A check mark in this field shows that itemcategories are considered as capital goodsand input VAT credit is available withrespect to the tax jurisdiction

Creditable A check mark in this field shows that itemcategories on which input VAT credit isavailable with respect to the tax jurisdiction

Standard Deduction Define the standard deduction availablefrom the base price to calculate the VATfor the item category in the tax jurisdiction.

VAT able Purchase Tax Define the purchase tax which is VAT ableon the item category over and above theCST. The VAT able purchase tax iscalculated on the base price and CST.

VAT Retn Lt % of ITC on Purch Define the VAT retention on the purchaseof item categories with respect to the

jurisdiction.

VAT retention is calculated on base priceof the Item.

If the VAT Retn Lt % of ITC on Purchdifference of Input VAT and the retentionwill be available for Input VAT credit basedon the usage in Non Taxable Sales andthe retention amount is loaded on the Item

Company Information

NAVIGATION : ADMINISTRATION → APPLICATION SETUP → GENERAL → COMPANY INFORMATION

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Field Comments

VAT Composition A check mark in this field shows thatCompany is under composition scheme.

Types Of Composition Select the type of composition from drop

down menu. The options available are:Retailer, Works Contract, Bakery,Restaurant /Club, and Second hand Motor Vehicle.

Export or Deemed Export A check mark in this field shows that theCompany is into export or deemed exportsales.

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Location Card

NAVIGATION :Warehouse →Setup →Locations→ Tax Information

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Field Comments

VAT Composition A check mark in this field shows thatlocation is under composition scheme.

Types Of Composition Select the type of composition from dropdown menu. The options available are:Retailer, Works Contract, Bakery,Restaurant /Club, and Second hand Motor Vehicle.

Export or Deemed Export A check mark in this field shows that thelocation is into export or deemed exportsales.

Customer Card NAVIGATION :Sales & Marketing →Sales →Customers→ Tax Information


Field Comments

T.I.N No Enter the TIN number of the customer. Thesystems checks the state code for TIN

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Field Comments defined in States form taking the referencefrom the state of the location and displaysa message: TIN No should s tart with “XY”(If the state code for TIN has been definedas XY).

Export or Deemed Export A check mark in this field shows that saleto the customer is either Export or DeemedExport.

VAT Exempted A check mark in this field shows thatcustomer lies in the VAT Exemptedcategory.

Vendor Card NAVIGATION :

Purchase →Planning →Vendors→ Tax Information


Field Comments

T.I.N No Enter the TIN number of the customer. The

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Field Comments systems checks the state code for TINdefined in States form taking the referencefrom the state of the location and displaysa message: TIN No should s tart with “XY”(If the state code for TIN has been definedas XY).

Composition A check mark in this field shows thatvendor is under composition scheme

Item Card

NAVIGATION :Pur chase →Planning →Items→ Tax Information


Field Comments

Fixed Asset A check mark in this field shows that theitem is a fixed asset.

Calculation of Input VAT on Item

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NAVIGATION :Pur chase → Order Processing →Orders.

To create a purchase order, fill the fields in Purchase Order as follows:

Vendor: 10000 (Delhi Postmaster)Location: Blue Structure: VAT Item: 1000 (Bicycle) Quantity: 10 Direct Unit cost Excluding VAT : 1000 Line Amount Excluding VAT: 10000 (The system will calculate it.) Non ITC Claimable Usage %: 50

Calculate Structure Value.

The system will calculate the VAT and distribute the VAT amount in Amount Loaded on

Inventory and Input Credit/Output Tax Amount fields.

Post the Purchase Order as Receive and Invoice.

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NAVIGATION :Purchase → History → Posted Invoice.

The user can view the posted transaction- G/L Entry and Details Tax Entry.

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The system will create the following entry:

Purchase A/C Dr. 10500Purchase Tax A/C Dr. 500To Vendor A/C Cr. 11000.

VAT has been calculated by taking the values as follows:

Base Value: 10000 VAT %: 10 Non ITC Claimable Usage %: 50 Tax Amount: 1000 Amount Loaded on Item: 500 ITC: 500.

We have given 50% usage, and the system has allocated the tax amount (50%) each inLoaded on Item and ITC.

If the Non ITC Claimable Usage % is 0, then the whole tax amount will be available for ITC.

The system will also create a Detail Tax Entry.

The user can view it by pressing Crlt+F8 (Zoom).

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In the above window Input Credit/Output Tax Amount field has value as: 500 and Amount Loaded on Item field has value as: 500.

Note 1: VAT can be calculated only if the vendor s state is matching with the locationstate. In the above case vendor state is Andhra Pradesh and the location state is also

Andhra Pradesh.

Note 2: For calculation of ITC, the Creditable Goods field in Tax Details Setup should betrue.

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Note 3: If the user is not using location card and kept the location code blank inpurchase order/invoice then also system will calculate VAT on the basis of CompanyInformation.

Calculation of VAT for Item can also be done by Purchase Invoice.

Calculation of VAT on Capital Goods.

NAVIGATION :Purchase → Order Processing →Orders.


Vendor: 10000 (Delhi Postmaster)Location: Blue Structure: VAT Item: 1000 (Bicycle) Quantity: 10

Direct Unit cost Excluding VAT : 50000 Line Amount Excluding VAT: 500000 (The system will calculate it.) Non ITC Claimable Usage %: 50

Place a check mark in Fixed Asset field in Item Card.Calculate Structure Value.

The system will calculate the VAT and distribute the VAT amount in Amount Loaded onInventory and Input Credit/Output Tax Amount fields.

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The user can view the deferment schedule before posting the Purchase Order.

Click the Order button and select Deferment Schedule.

The system will create the deferment entries according to the define deferment periodsin the State setup.

In the above window the user can check if the system is making the correct defermentschedules and the ITC will distributed in the future deferment periods equally.

The user can print deferment schedule before posting .

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Enter the value in Document No. field: 106627

Click Preview .

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This report will give the clear picture of the deferment schedules.





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Fixed Asset A/C Dr. 525000

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VAT Deferred A/C Dr. 25000To Vendor A/C Cr. 550000.VAT has been calculated by taking the values as follows:

Base Value: 500000 VAT %: 10 Non ITC Claimable Usage % : 50 Tax Amount: 50000 Amount Loaded on Item: 25000 ITC: 25000.

We have given 50% usage, the system has allocated the tax amount 50% each inLoaded on Item and ITC.

If the Non ITC Claimable Usage % is 0, then the whole Tax Amount will available for ITC.

The system will also create Detailed Tax Entries.

The system will create 11 detail tax entries, because in the setup we have defined 10deferment periods. First entry will be identified as ITC available for settlement in thesame tax period and the rest ten entries are transferred to VAT deferred account.

Note 1: Fixed Asset Deferments will be created only if the per unit cost price of fixedasset is lying between the starting and ending threshold amount.

Note 2: It is mandatory to place a check mark in Capital Goods fields in Tax Detailssetup if the user wants to calculate Deferments Schedules for a fixed assets.

Note 3: The same can be done if the user is using Fixed Asset module. In this case theuser has to create a FA card and has to mention the tax group code in FA card.

Note 4: If the user is not using FA Module and still want to make deferments for Fixed Asset then the user should place a check mark in Fixed Asset field in Item card.

Note 5: It always advisable to create separate Purchase order/invoice for item,GL andFixed Asset.

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Calculation of VAT for fixed Asset can also be done through Purchase Invoice.

Calculation of VAT if the Vendor has opted CompositionScheme

Place a check mark in Composition Scheme field in Vendor card.

NAVIGATION :Purchase → Order Processing →Orders


Vendor: 10000 (Delhi Postmaster)Location: Blue

Structure: VAT

Item: 1000 (Bicycle) Quantity: 10 Direct Unit cost Excluding VAT : 1000 Line Amount Excluding VAT: 10000 (The system will calculate it.) Non ITC Claimable Usage %: 50

Place a check mark in the Composition field.Calculate Structure Value.

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The system will calculate the VAT and the tax amount will be loaded on item becausethe Vendor has opted Composition scheme.

Post the Order with Receive and Invoice.


NAVIGATION :Purchas e → History → Posted Invoice.


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Purchase A/C Dr. 11000To Vendor A/C Cr. 11000.

The system will calculate the VAT amount and the whole tax amount will be loaded onItem.

The system will also create Detail Tax Entries.

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In the above window Input Credit/Output Tax Amount field has the value as: 0 and Amount Loaded on Item field has the value as: 1000.

Note 1: If the user has opted a Composition scheme then the user has to place acheck mark in Location card and also mention the type of Composition. The user has to follow the same process that has been followed in case when the vendor has opted for Composition scheme.

Note 2: The system will calculate the VAT amount and tax amount will be loadedon Item.

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Note 3: If the user is not using location card then he/she has to place a checkmark in composition scheme field in Company Information master setup and alsoselect the type of composition.

These cases can also be handled through Purchase Invoice.

Calculation of Retention Limit on VAT.

Mention the VAT Retention limit % of ITC NTS as 4% in Tax Jurisdiction .



Vendor: 10000 (Delhi Postmaster)Location: Blue Structure: VAT Item: 1000 (Bicycle) Quantity: 10 Direct Unit cost Excluding VAT : 1000 Line Amount Excluding VAT: 10000 (The system will calculate it.) Non ITC Claimable Usage %: 50

Calculate Structure Value.The system will calculate the VAT and distribute the VAT amount in Amount Loaded onInventory and Input Credit/Output Tax Amount fields.

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Purchase A/C Dr. 10200Purchase Tax A/C Dr. 800To Vendor A/C Cr. 11000


Base Value: 10000 VAT %: 10 Retention limit %: 4 Non ITC Claimable Usage %: 50 Tax Amount: 1000 Amount Loaded on Item: 200

ITC: 800

Steps for calculation of retention limit:

Step 1: Retention has been calculated on the base amount (10000*4%) = 400.

Step 2: Retention amount 400 has been deducted from the tax amount which is 1000.1000-400= 600.In this case 600 is ITC.

Step 3: Non ITC Claimable Usage % is 50. It means 50% of 400.400*50% = 200, it will be loaded on Item and the rest 200 will be available for ITC.

We have given 50% usage, the system has allocated the tax amount 50% each in Loaded onItem and ITC.

If the Non ITC Claimable Usage % is 0, then the whole tax amount will available for ITC.

The system will also create Detail Tax Entries.

The user can view it by pressing Crlt+F8 (Zoom) keys.

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Following are the permutations and combinations for the calculation of Retention Limit inNAVISION.

1. Retention Limit are defined at Tax Jurisdiction or Tax Details Individually

a) The Retention Limit is defined at Tax Details level. Input VAT credit based onthe Non ITC Claimable Usage % is calculated on the Input VAT/ Vat ablePurchase Tax – Retention Amount and the balance of the Input VAT/ Vatable Purchase Tax is loaded on Item/Capital Goods

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b) The Retention Limit is defined at Tax Jurisdiction level. VAT Retn Lt loadedon Item field will be unchecked. Input VAT Credit will be calculated as:

(Input VAT / Vat able Purchase Tax – Retention Amount) + Balance of theInput VAT/ Vat able Purchase Tax x Non ITC Claimable Usage %

c) The Retention Limit is defined at the Jurisdiction level and VAT Retn Ltloaded on Item field will be checked. Retention amount will be loaded onItem/Capital Goods and the remaining amount ( Input VAT/ Vat ablePurchase Tax – Retention amount) is available for input VAT credit based onthe usage.

2. Retention Limit are defined at Tax Jurisdiction and Tax Details

a) Retention Limit at Tax Jurisdiction with VAT Retn Lt loaded on Item field isunchecked.

The Input VAT credit and the amount loaded on item/ Fixed Asset areused as:

V = Input VAT/ Vat able Purchase TaxX = Retention Amount as defined at JurisdictionY = Retention Amount at Tax Details

i. If V>Y

Input VAT Credit will be

(V-Y) x ( (100- Non ITC Claimable Usage %)/100)

ii. If (V-X-Y) <= 0 and V< YInput VAT Credit will be 0

The balance of Input VAT/CST (Input VAT/CST - Input VATCredit) is loaded on the item.

b) Retention Limit at Tax Jurisdiction with VAT Retn Lt loaded on Item field ischecked.

The Input VAT credit and The Amount loaded on item/ Fixed Assetare arrived as under

V = Input VAT/ Vat able Purchase TaxX = Retention Amount as defined at JurisdictionY = Retention Amount at Tax Details

i. If (V- Y) <= 0Input VAT Credit will be 0

ii. If (V- Y) > 0Input VAT Credit will be

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(V-Y) x ( (100- Non ITC Claimable Usage %)/100)

The balance of Input VAT/CST (Input VAT/CST - Input VATCredit) is loaded on the Item.

Note 1: All retentions limit calculations can be done for Fixed Asset and GL.

Note 2: Retention limit calculation can be done for VAT as well as Vat able purchase taxif applicable.

These types of calculations can also be handled through Purchase Invoice .

Calculation of Vat able Purchase Tax on CST



Vendor: 40000 ( Lewis Home Furniture’s, State: New Delhi)Location: Blue (State is Andhra Pradesh)Structure: VAT Item: 1000 (Bicycle)

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Quantity: 10 Direct Unit cost Excluding VAT : 1000 Line Amount Excluding VAT: 10000 (The system will calculate it.) Non ITC Claimable Usage %: 50

Calculate Structure Value.The system will first calculate CST and then the system will calculate the Vat tablepurchase tax based on base amount and tax amount.




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Purchase A/C Dr. 12100Purchase Tax A/C Dr. 1100To Vendor A/C Cr. 11000.To Sales Tax A/C Cr. 2200


Base Value: 10000 CST/VAT %: 10 Vat table Purchase Tax %: 20 (defined in Tax Details setup).

Non ITC Claimable Usage % :50 Tax Amount: 1000 Amount Loaded on Item: 2100 ITC: 1100

Steps for the calculation of Vat table purchase tax:

Step 1: Base amount is 10000 and the CST % is 10. The system has calculated 10% on10000 (10000*10%= 1000).

Step 2: Now base amount for Vat table purchase tax is 11000 (10000+1000), which isthe total of base amount and CST amount.

Step 3: Vat able purchase tax% is 20. The system has calculated 20% on 11000.So Vat table purchase tax = 11000*20% = 2200.

We have given 50% usage, the system has allocated the Tax amount 50% each inLoaded on Item and ITC.

Now the ITC amount is 1100 and amount loaded on item is 2100 (1000 which is CST +1100 which is 50% is Vat table purchase tax).

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If the non ITC claimable usage % is 0, then the whole Vat table purchase tax amount willbe available for ITC.

The system will also create Detailed Tax Entry.



Note 1: Vat able purchase tax can be calculated only if the CST is applicable.

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Note 2: CST can be calculated if the vendor state is different from the location state.Note 3: Vat able purchase tax can also be calculated for fixed assets.

Note 4: If Vat table purchase tax is applicable there may be the case of calculatingretention limit on Vat table purchase tax. In this case, the user can calculate theretention limit from Purchase Order/Invoice.

Note 5: Vat able purchase tax can also be calculated through Purchase Invoice.

Calculation of VAT if Purchases are meant for Export orDeemed Export

Following are the steps to be followed:

Step 1: If the purchases are meant for Export Sales then the user has to place a checkmark in Export or Deemed Export field in Location card.

Step 2: Create a Purchase Order/Invoice and select the vendor and location (locationcard in which you have placed a check mark in Export or Deemed Export field).

Step 3: Select the structure as: VAT.

Step 4: Mention item and quantity with direct unit cost.

Step 5: Calculate Structure Value.

Step 6: The system will calculate the VAT amount according to the defined percentage.

Step 7: Post the Purchase Order.

Step 8: Navigate the posted invoice.

Step 9: The system will create the normal VAT G/L entry.

Step 10: In Detail Tax Entry the Export or Deemed Export field will automatically getchecked. It means the system will itself identify that the purchase has been meant for Export Sales and in VAT Settlement it will populate the ITC amount in Input VAT Credit(Exports Sales) field.

Note 1: If the purchase is meant for Export Sales then the ITC is available for settlementin the same tax period.

Note 2: If the user is not using location card then he/she has to place a check mark inExport or Deemed Export field in company information master card.

Purchase Credit Memo.

NAVIGATION :

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Purchase → Order Processing →Credit Memos.

To create a purchase credit memo, fill the fields in Purchase Credit Memoas follows:

Vendor: 10000 Location: Blue Structure: VAT Item: 1000 (Bicycle) Quantity: 10 Direct Unit Cost : 1000 Line Amount: 10000 (The system will calculate it.)

Non ITC Claimable Usage %: 50

Calculate Structure Values.The system will calculate the VAT amount and will distribute 50% each in Amountloaded on Item and in ITC.

Post the Purchase Credit Memo.


NAVIGATION :Purchase → History → Posted Credit Memos.

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Purchase A/C Cr. 10500Purchase Tax A/C Cr. 500To Vendor A/C Dr. 11000

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Base Value: 10000 VAT %: 10 Non ITC Claimable Usage % : 50 Tax Amount: 1000 Amount Loaded on Item: 500 ITC: 500

We have given 50% usage, the system has allocated the Tax amount 50% each inLoaded on Item and ITC.

If the non ITC claimable usage % is 0, then the whole Vat table purchase tax amount willbe available for ITC.

The system will create Detail Tax Entry.


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Note 1: The user can use purchase credit memo for fixed assets also. In this casedeferment schedules will be reversed with negative values (Only the unsettledDeferment schedules will be reversed).

Note 2: The user can also calculate retention limit through Purchase Credit Memo.

Note 3: Calculation of VAT and retention limit can also be done with Applies to Doc andCopy document functions.

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Note 4: All tax calculations from Purchase Credit Memo will be shown in negative inDetail Tax Entry.

Calculation of Output VAT

NAVIGATION :Sales & Marketing →Order processing → Orders

To create a sales order, fill the fields in Sales Order as follows:

Customer: 10000 Location: Blue Structure: VAT Item: 1000 Quantity: 10 Unit Price : 4000 Line Amount: 40000 (The system will calculate it.) Calculate Structure Values.

The system will calculate the VAT amount according to the given VAT %.

Post the Order as Ship and Invoice.


NAVIGATION :Sales & Marketing →History → Posted Invoices.

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Customer A/C Dr. 44000Sales Tax A/C Cr. 4000Sales A/C Cr. 40000.

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Base Value: 40000 VAT %: 10 Tax Amount: 4000 Input Credit/Output Tax Amount: 4000.

The system will also create Detail Tax Entry.


In the above window Input Credit/Output Tax Amount field has the value as: 4000.

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Note 1: Output VAT can be calculated for fixed assets also.

Note 2: All ITC values in Details Tax Entry will be shown in negative.

Output VAT can also be calculated through Sales Invoice.

Note 3: The user can also calculate CST from sales Order/Invoice. In that case thecustomer state should be different from location state. The tax amount (CST) will also goin sales tax account.

Calculation of Output VAT in case of Standard Deduction

To create a sales order, fill the fields in Sales Order as follows:

Customer: 10000 Location: Blue Structure: VAT Item: 1000 Quantity: 10 Unit Price : 4000 Line Amount: 40000 (The system will calculate it.) Standard Deduction: 20 (The system will populate the percentage as

defined in the Tax Details Setup).Calculate Structure Values.

Post the order as Ship and Invoice.

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NAVIGATION :Sales & Marketing →History → Posted Invoices.

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Customer A/C Dr. 43200Sales Tax A/C Cr. 3200Sales A/C Cr. 40000.


Base Value: 40000 VAT %: 10 Standard Deduction: 20. Tax Amount: 3200 Input Credit/Output Tax Amount: 3200

Steps for the calculation of output tax in case of standard deduction:

Step 1: Base amount: 40000, VAT%: 10%, and Standard Deduction%: 20.

Step 2: First the system will calculate 20% on 40000 (40000*20%) = 8000 as standarddeduction.

Step 3: Standard deduction will be deducted from the base amount and will be(40000-8000) 32000.

Step 4: The system will then calculate VAT 10% on 32000.Means final Tax amount =32000*10% = 3200.



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Note 1: Standard deduction can also be calculated for fixed assets.

Note 2: The Values in detail tax entry will show in negative.

Note 3: Standard Deduction tax amount calculation will be displayed on the sales line.

This transaction can also be done through Sales Invoice.

Sales of Goods in case of Export or Deemed Export /VAT Exempted

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Steps to be followed:

Step 1: Place a check mark in Export or Deemed Export / VAT Exempted field inCustomer card.

Step 2: Create Sales Order/Invoice, select the customer and location.

Step 3: Fill in the quantity with unit cost price.

Step 4: Calculate Structure Values.

Step 5: The system will not calculate any VAT because the Export or DeemedExport/VAT Exempted fields are checked in Customer Card.

Step 6: The Posted entry will not reflect in any tax account.

Step 7: The system will create normal entry:Customer A/C Dr.Sales A/C Cr.

Note 1: VAT exempt and export or deemed export field will also be displayed in the salesheader. This will come from the customer card.

Sales Credit Memo

NAVIGATION :

Sales & Marketing →Order Processing → Credit Memos

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To create a sales credit memo, fill the fields in Sales Credit Memo asfollows:

Customer: 10000 Location: Blue Structure: VAT Item: 1000 Quantity: 10 Unit Price : 4000 Line Amount: 40000 (The system will calculate it.) Standard Deduction: 20 (The system will populate the percentage as

defined in the Tax Details Setup).Calculate Structure Values.

Post the Sales Credit Memo.


NAVIGATION :Sales & Marketing →History → Posted Credit memos

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Customer A/C Cr. 43200Sales Tax A/C Dr. 3200Sales A/C Dr. 40000

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Base Value: 40000 VAT %: 10 Standard Deduction: 20 Tax Amount: 3200 Input Credit/Output Tax Amount: 3200

Steps for the calculation of output tax in case of standard deduction:

Step 1: Base amount: 40000, VAT%: 10%, and Standard Deduction%: 20.

Step 2: First the system will calculate 20% on 40000 (40000*20%) = 8000 as standarddeduction.

Step 3: Standard deduction will be deducted from the base amount and will be(40000-8000) 32000.

Step 4: The system will then calculate VAT 10% on 32000.Means final Tax amount =32000*10% = 3200.



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Note 1: Sales Credit memo can be handled for fixed assets also.

Note 2: All values in Details Tax Entry will show in positive.

VAT Adjustment

NAVIGATION :

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Financial Manage ment→ General Ledger→ Value Added Tax → VAT Adjustment

Fill in the field according to these guidelines:

Field Comments

VAT Entry No Choose the VAT entry number from thelookup list for which adjustment is made

Following fields are populated with the VAT entry and are not editable:

Field Comments

Posting Date The posting date of the VAT entry beingadjusted

Document Type The document of the VAT entry beingadjusted

Document No The document number of the VAT entrybeing adjusted

VAT Amount IN The VAT amount of the VAT entry beingadjusted

VAT Percentage IN The VAT percentage of the VAT entrybeing adjusted

Original Location The location of the VAT entry beingadjusted

Original Quantity The quantity of the VAT entry being

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Field Comments adjusted

Original Non ITC Claim Usage % The non ITC claim usage percentage of the VAT entry being adjusted

Input Credit/Output Tax Amount The input VAT credit of the VAT entrybeing adjusted

Amount Loaded on Item The amount loaded on Item of the VATentry being adjusted

VAT Adjustment Type:

The Following adjustment options are displayed1. Change in Usage:

The user has to select the Change in Usage option if there is change in theusage and fill in the fields according to these guidelines:

Field Comment

Quantity to be Adjusted Enter the quantity to be adjusted for change in Non ITC Claimable usage %.

Non ITC Claimable Usage % Enter the actual usage %.

The Revised Input Credit/Output Tax Amount, Amount Loaded on Item and

amount of adjustment are calculated and displayed in the respective fields

VAT Entry No. Choose the VAT entry number as 4224 from lookup list.VAT Adjustment Type : Select the VAT adjustment type as Change in UsageQuantity: Enter the quantity as10Non ITC Claimable Usage % 75

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The original entry has the following values:

Quantity: 10 Base amount: 10000 VAT %: 10 Non ITC Claimable Usage %: 50 ITC: 500 Amount loaded on Item: 500

After entering Non-ITC claimable usage % as 75 in Adjustment journal the system willshow 250 as amount of adjustment in Item field.

250 has been loaded on Item after Adjustments and previously it was available in ITC.

Post the Adjustment Journal.

Viewing the Ledger entry from Posted Invoices

The system has created the following entry.

Purchase A/C Dr. 250Purchase Tax A/C Cr. 250.

Detail Tax Entry:

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In Detail Tax Entries, the system has reversed the original entry with original values andcreated a new entry with new values according to the done adjustments.

Note 1: Change in usage can also be handled for fixed assets. The system will adjustonly those deferments which are not settled.

Note 2: The user can do partial quantity adjustments in adj ustment type “Change inUsage”.

Note 3: No need to enter the location code in case of change in usage in adjustment journal.

2. Branch Transfer:The user has to select the Branch Transfer option if there is branch transfer and fill in the fields according to these guidelines:

Field Comment

Quantity to be Adjusted Enter the transferred quantity.

Location Code Enter the transferee location.

The Revised Input Credit/Output Tax Amount, Amount Loaded on Item and amount of adjustment are calculated, displayed in the respective fields

Note :I. Use this adjustment type in both inter state and intra state

branch transfer.II. Use this adjustment type when ever there is transfer from

normal sales location to export sales.

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Fill the fields as follows:

VAT Entry No 4227 VAT Adjustment Type Branch Transfer Quantity: 10 Location Code: Green (We are handling Interstate Branch Transfer)


Quantity: 10 Base amount: 10000 VAT %: 10 ITC: 1000 Location: Blue

In State Setup, Branch Transfer Retention % is 5 %.

We have entered the Location as Green in Adjustment Journal and branch t/f Retentionas 5%. The system will calculate 5% on 10000. It means 500 will be loaded on Item.


Viewing the Ledger Entry from Posted Invoices

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The system has created the following entry:

Purchase A/C Dr. 500Purchase Tax A/C Cr. 500

Detail Tax Entry:

In Detail Tax Entry:

The system will reverse the original entry with original values for the same location(Blue).

Another entry will be done for the Adjustment in the Input Tax Credit for the samelocation (Blue)

Last entry will be done for the new location (Green) without ITC and Amount Loaded onInventory.

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Note 1: Branch Transfer can also be handled for fixed assets. The system will adjustonly those deferments which are not settled.

Note 2: In case of Intra state branch transfer, the system will reverse the original valuesfor old location and the new entry will be created for new location with ITC and Amountloaded on Item values. These types of transfers will be useful in transfers of itemspurchase for normal sales to export sales.

Note 3: The user can do partial quantity adjustments in adj ustment type “BranchTransfer”.

3. Lost or Destroyed:The user has to select the Lost or Destroyed option if there is loss or destruction and fill in the fields according to these guidelines:

Field Comment

Quantity to be Adjusted Enter the Lost or Destroyed quantity.


VAT Entry No.: 4231VAT Adjustment Type: Lost / Destroy Quantity: 10



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We have entered the quantity as 10 in Quantity field in Adjustment Journal. It means 10quantities has been lost or destroyed.

1000 has been loaded on Item after Adjustments and previously it was available in ITC.


Viewing the Ledger Entry from Posted Invoices .

The system has created the following entry:


Detail Tax Entry:

The system will reverse the original entries with values.

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Note 1: Lost/Destroy can also be handled for fixed assets. The system will reverse onlythose deferments which are not settled.

Note 2: The user can do partial quantity adjustments in adjustment type “BranchTransfer”.

4. Non business consumption:The user has to select the Non business consumption option if there isConsumption and fill in the fields according to these guidelines:

Field Comment

Quantity to be Adjusted Enter the consumed quantity.


Note: Enter the description of the adjustment in all the above cases of adjustment

VAT Entry No.: 4233 VAT Adjustment Type: Non business consumption.Quantity: 10



We have entered the quantity as 10 in Quantity field in Adjustment Journal. It means 10quantities has been consumed.

1000 has been loaded on Item after Adjustments and previously it was available in ITC..

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Viewing the Ledger Entry from Posted Invoices

System has created the following entry:


Detail Tax Entry:

Note 1: Non business consumption can also be handled for fixed assets. The system willreverse only those deferments which are not settled.

Note 2: The user can do partial quantity adjustments in adjustment type Non businessconsumption.

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VAT Settlement

NAVIGATION :Financial Management → General Ledger → Value Added Tax → VATSettlement


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Field Comments

State Code Select the state for which VAT settlementis to be done.

Starting Date Enter the tax period starting date in thisfield. If the starting date is not equal to oneday after the previous settlement endingdate then an error message pops upwhich will define the starting date.

Ending Date The systems displays the ending datetaking the starting date and the tax periodinto consideration

.

Type The system will show „Original in this field.

Revision No The system will generate the number atthe time of revision.

Document No.The user has to enter the documentnumber before posting the Settlementform.

Following fields are present at the line level:

Field Name Description Remarks

Total Out PutVAT

Populated with the output VATpayable for the tax period

This field is non editable andcontains a drill down buttonwhich displays the entries

VAT Adjustment

Amount

Populated with the adjustment

amount for the tax period

This field is non editable and

contains a drill down buttonwhich displays the entries

Input Vat Credit (Normal Sales)

Populated with the input VATcredit amount for sales whichare not export sales


VAT Receivable (Capital Goods)

Populated with the input VATcredit of capital goods which

This field is non editable andcontains a drill down button

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Field Name Description Remarkscan be claimed in the currenttax period

which displays the entries

Balance Displays the balance of VATpayable after setting off theinput VAT credit on normalsales, VAT adjustment VATReceivable

This field is non editable

Carry Forwardfrom PreviousPeriod

Displays the balance amount of the excess Input VAT creditcarried forward up to Last TaxPeriod


Refund The user can enter the Amountof Refund wished to Claimed

This field is editable andcontains validations for

Amounts, which ismore than theminimum amount of thecarried forward amountof no of Specifiedperiod for refund fromthe starting date.

Amount, which is morethan the carriedforward from previousperiod

Displays Error Messages in Above Cases

Setoff againstcurrent VAT

The user can enter the Amountof wished to setoff against VATpayable

This field is editable andcontains validations for:

Amount, which is morethan the VAT payable

Amount, which is morethan the Carry Forwardfrom Previous Periodless Refund


Carried Forward Displays the balance amount of the excess Input VAT creditcarried forward after reducingthe Refund and Setoff againstCurrent VAT


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Field Name Description RemarksVAT Payable Displays the balance VAT

payable which is balance -setoff against current VAT


Excess VAT foradjustment(Applicable ifVAT Payable isNegative)

Displays the VAT payableamount if it is Negative


Refund The user can enter the amountof refund wished to claimed

This field is editable andcontains validations for

Amount, which is morethan the minimumamounts of the carriedforward amount of noof Specified period for refund from the endingdate.

Amount, which is morethan the Excess VATfor adjustment


Setoff againstCST Payable

The user can enter the Amountof wished to Setoff againstCST payable

This field is editable andcontains validations for:

Amount, which is morethan the CST payable

Amount, which is morethan the Excess VATfor adjustment lessRefund


Carry forward Displays the balance amount of the excess Input VAT creditcarried forward less the Refundand Setoff against Current CSTpayable


CST Payable Populated with the CSTPayable for the Tax Period


Input VAT Credit Populated with the Input VAT This field is non editable and

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Field Name Description Remarks(Exports Sales) Credit Amount for sales which

not Export Salescontains a drill down buttonwhich displays the entries

Refund The user can enter the Amountof Refund wished to Claimed

This field is editable andcontains validation for

Amount, which is morethan the Input VATCredit (Exports Sales)

Displays Error Message in Above Cases

Setoff againstVAT payable



Amount, which is morethan Input VAT Credit(Exports Sales) lessRefund


Setoff againstCST payable



Amount, which is morethan Input VAT Credit(Exports Sales) after reducing Refund andSetoff against VATpayable


Carry forward Displays the balance amount of the excess Input VAT (ExportsSales) credit carried forwardless the Refund , Set off

Against VAT Payable Setoff against Current CST payable


Net VAT Payable Displays the balance amount of the excess of VAT payable after Set off Against VAT PayableSetoff from Input VAT Credit(Exports Sales)


Net CST Payable Displays the balance amount of the excess of CST payable after Set off Against VAT PayableSetoff from Input VAT Credit(Exports Sales)


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After making the adjustments in the Settlement form the user can post the Settlementform.

View the posted Ledger Entries

NAVIGATION :Financial Management → General Ledger → History → Registers

The system will transfer the purchase tax amount, sales tax amount, and Vat deferredamount to VAT Payable account. The system will create the G/L entries on the endingdate of tax period.

If the user wants to do any alterations in the posted settlement form?

Open the same Tax Period Settlement form and click Undo post menu item in postingmenu button. By clicking Undo post the system will create the copy of the OriginalSettlement form with revision number. This revised settlement is not editable. The user can do any alterations in the original one.

Clicking Undo post, the system will reverse the original G/L entries with the samedocument number.

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Alteration in Settlement form

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Now we have adjusted the input VAT credit (export sales) amount 2000 with setoff against CST payable. In the previous settlement form it was equally setoff against VATpayable and CST payable.

Post the Settlement form with new document number.

Again view the posted ledger entries.

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The system will create the new G/L entries according to the adjustment done in theSettlement form.

View the history of Settlement

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Click the Settlement menu button and select the list menu item to view the historyof settlement.

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Fields Description :

State code : State will be displayedStarting Date : Starting date of the settlementType: It will show if settlement is Original or Revised.Revision No.: It shows the revision number.Net VAT payable Amount : Net VAT payable after setoff.Net CST payable Amount : Net CST payable after setoff.

Carried forward amount : Excess credit carried forward.Settlement : True or false

Note 1: System will display the message for any new entries for period which hasbeen already settled.

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VAT Reporting

NAVIGATION :Financial Management → General Ledger → Report s → VAT Reporting

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Following reports are available in VAT:

Interstate Sales and Purchases

NAVIGATION :Financial Management → General Ledger → Report s → VAT Reporting → Interstate Sales and purchases

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All Inter state purchase and sales can be viewed from this report.


Field Comment

State Select the State.

Posting Date Period

The report can be previewed as following and printed using the respective buttons.

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Intrastate Sales and Purchases

NAVIGATION :Financial Management → General Ledger → Reports → VAT Reporting → Intrastate Sales and Purchases

All intra state purchase and sales can be viewed from this report.

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Field Comment

State Select the state.

Posting Date Period


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Purchase Book VAT

NAVIGATION :Financial Management → General Ledger → Reports → VAT Reporting → Purchase Book VAT

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Field Comment


Posting Date Period

All inter-state and intra-state purchases can be viewed from this report.


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Sales Book VAT NAVIGATION :Financial Management → General Ledger → Reports → VAT Reporting → SalesBook VAT

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Field Comment


Posting Date Period

All inter-state and intra-state purchases can be viewed from this report .

The report can be previewed as following and printed using the respective buttons

VAT Settlement

NAVIGATION :Financial Management → General Ledger → Reports → VAT Reporting → VAT

Settlement

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Field Comment


Starting Date Enter the starting date


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VAT Deferment

NAVIGATION :Financial Management → General Ledger → Reports → VAT Reporting → VATDeferment

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Field Comment


Starting Date Enter the starting date

Ending Date Enter the ending date


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VAT Credit Carried Forward

NAVIGATION :Financial Management → General Ledger → Reports → VAT Reporting → VATCredit Carried Forward


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Field Comment



Viewing and Printing the Tax Invoice

NAVIGATION :Sales & Marketing → History→ Posted Invoices

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Select the Print Tax Invoice on the print button following Tax Invoice is previewed andprinted .

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Appendix

ILLUSTRATIONS

1. VAT dealers with full Taxable Turnover (INTRA STATE SALES) andPurchases in the state

VAT dealer dealing in commodities which are taxable at 4% and 12.5% respectivelyunder the provisions of the Act. The dealer is not dealing in non taxable goods, alsobuys goods which are taxed at 4% and 12.5% required for business. Sale andpurchases are in the same state.

The input VAT credit available and VAT payable for a tax period is illustrated below:

PURCHASES ( INPUT) SALES ( OUTPUT)RATE OF VAT TURNOVER VAT PAID TURNOVER VAT PAYABLE

4% Goods 1,00,000 4,000 60,000 2,400

12.5% Goods 2,00,000 25,000 2,20,000 27,500

TOTAL INPUT VAT 29,000 TOTAL OUTPUTVAT

29,900

INPUT VAT CREDIT 29,000

VAT PAYABLE = Output VAT – Input VAT Credit= Rs.29,900 – Rs.29,000= Rs.900

The Input Tax Credit of the total period will be setoff against the Output VAT of the period

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Following are the entries:For purchases of 4% goods in the above example

Debit CreditPurchases A/c 100000Purchase Tax 4% 4000

Vendor A/c 104000

For purchases of 12.5% goods in the above exampleDebit Credit

Purchases A/c 200000Purchase Tax 12.5% 25000

Vendor A/c 225000

For sales of 4% goods in the above exampleDebit Credit

Customer A/c 62400Output VAT 4% 2400

Sales A/c 60000

For sales of 12.5% goods in the above exampleDebit Credit

Customer A/c 247500Output VAT 12.5% 27500

Sales A/c 220000

VAT Settlement at the end of tax period for the above transactionsValue Excluding VAT VAT

Output VATOutput VAT 4% 60000 2400Output VAT 12.5% 220000 27500Total Output VAT 29900INPUT VAT CREDITPurchase Tax 4% 100000 4000

Purchase Tax 12.5% 200000 25000Total Input VAT Credit 29000VAT Payable 900

2. VAT dealers making both Taxable Turnover and Non Taxable Turnover(INTRA STATE SALES) and Purchases in the state

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VAT dealer makes taxable turnover and non taxable turnover. The dealer buys and sellsgoods, which are taxable and non taxable in the same State.

The input VAT credit available and VAT payable for a tax period is illustrated below:

PURCHASES ( INPUT) SALES ( OUTPUT)RATE OF VAT TURNOVER VAT PAID TURNOVER VAT

PAYABLE

4% Goods 1,00,000 4,000 1,20,000 4,800

12.5% Goods 1,00,000 12,500 1,80,000 22,500

Non TaxableGoods

50,000 NIL 1,00,000 NIL

4% goodsused as commoninputs for bothtaxable &non taxablegoods

10,000 400 NIL NIL

12.5% goodsused in businesscommon for bothtaxable andnon taxablegoods

20,000 2,500 NIL NIL

TOTAL INPUT VAT 19,400 TOTALOUTPUT TAX

27,300

1. Total taxable turnover for the period: Rs.3, 00,000

2. Total non taxable turnover for the period: Rs.1, 00,000

3. Total turnover for the period: Rs.4, 00,000

Calculation of Input VAT Credit

4% rate of goods 12.5% rate goods

1. Input VAT Credit for Specific inputs Rs 4,000 Rs 12,5002. Input VAT Credit for Common Inputs 400x300000/400000

2500x300000/400000

Rs 300 Rs 1875TOTAL INPUT VAT CREDIT RS 18,675VAT PAYABLE = Output VAT

– Input VAT Credit= Rs.27, 300 – Rs.18, 675= Rs.8, 625

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The Input VAT Credit on the common inputs used in Taxable and non Taxable Turnover will be equal to the result of: input VAT x Taxable Turnover / Total Turnover

4. VAT dealers having Inter State Purchases

VAT dealer makes taxable turnover and non taxable turnover.The dealer buys and sell goods, which are taxable and non taxable. Purchases are bothintra state and inter state but the sales are intra state only.

The input Vat credit available and Vat payable for a tax period are illustrated below:

PURCHASES ( INPUT) SALES ( OUTPUT)

RATE OF VAT TURNOVER

VAT/CSTPAID

TURNOVER VATPAYABLE

4% Goods 1,00,000 4,000 1,20,000 4,800

12.5% Goods 1,00,000 12,500 1,80,000 22,500

Non Taxable Goods 50,000 NIL 1,00,000 NIL4% goodsused as commoninputs for bothtaxable &non Taxable goods

10,000 400 NIL NIL

Inter State 20,000 800 ( CST) NIL NILTOTAL INPUT VAT 16900 TOTAL OUTPUT

VAT 27,300

T

1. Total taxable turnover for the Period : Rs.3, 00,000

2. Total non taxable turnover for the Period : Rs.1, 00,000

3. Total turnover for the period : Rs.4, 00,000

Calculation of Input Vat Credit

4% rate of goods 12.5%

rate goods 1. Input Vat Credit for Specific inputs Rs 4,000 Rs 12,5002. Input Vat Credit for Common Inputs 400x300000/400000

Rs 300TOTAL INPUT VAT CREDIT RS 16,800

VAT PAYABLE = Output Vat – Input Vat Credit= Rs.27, 300 – Rs.16, 800= Rs.10, 500

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1. The Input Vat Credit on the common inputs purchased in same state,used in Taxable and Non Taxable Turnover will be equal to the result of: Input Vat x Taxable Turnover / Total Turnover

2. There is no input Vat credit on the goods purchased from other state.

VAT dealers having Inter state Purchases and SalesVAT dealer makes taxable turnover and non taxable turnover.The dealer buys and sells goods, which are taxable and non taxable. The purchases andsales both are Intra-state and inter-state.The input VAT credit available and VAT payable for a tax period can be illustrated below:

PURCHASES ( INPUT) SALES ( OUTPUT)

RATE OF VAT TURNOVERVAT/CSTPAID

TURNOVER VAT/CSTPAYABLE

4% Goods 1,00,000 4,000 1,20,000 4,80012.5% Goods 1,00,000 12,500 1,80,000 22,500

Non Taxable Goods 50,000 NIL 1,00,000 NIL4% goodsused as commoninputs for bothtaxable &non Taxable goods

10,000 400 NIL NIL

Inter State 20,000 800 (CST) 1,00,000 4,000(CST)TOTAL INPUT VAT 16900 TOTAL OUTPUT

VAT 27,300

1. Total taxable turnover for the Period : Rs.4, 00,000

2. Total non taxable turnover for the Period : Rs.1, 00,000

3. Total turnover for the period : Rs.5, 00,000

Calculation of Input VAT Credit

4% rate of goods 12.5% rate goods

1. Input VAT Credit for specific inputs Rs 4,000 Rs 12,5002. Input VAT Credit for common Inputs 400x400000/500000

Rs 320TOTAL INPUT VAT CREDIT RS 16,820

VAT PAYABLE = Output VAT – Input VAT Credit= Rs.27300 – Rs.16, 820= Rs.10480

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CST PAYABLE = Rs. 4000 1. The Input VAT Credit on the common inputs purchased in same state,

used in taxable and non taxable turnover will be equal to the result of Input VAT x Taxable Turnover / Total Turnover

2. There is no Input VAT Credit on the goods purchased from other state.

3. The Input VAT Credit can be setoff against CST payable 4. The CST sale are treated as zero rated sale with respect to State VAT

Act and included in the Taxable turnover

6. Capital Goods and Input VAT Credit

1. VAT dealer purchases machinery 1 that is used in the production /process of the Taxable Turnover. The State has determined that the inputVAT credit on capital goods can be claimed over 20 tax periods.

The Input VAT Credit available for setoff in same period and input VATcredit deferred is illustrated below.

Purchase Price of Machinery Rs 10, 00,000VAT @ 4% Rs 40,000Input VAT Credit Rs 40,000Input VAT Credit claimable in Current Tax Period Rs 2000 Input VAT Credit Deferred Rs 38000 The entry will be:

Debit CreditMachinery A/c 1000000VAT Deferred A/c 40000

Vendor A/c 1040000

Entry at end of the tax period:

Debit CreditVAT Settlement A/c 2000VAT Deferred A/c 2000

2. VAT dealer purchases machinery 2 used in the production / process of the Taxable Turnover and Non Taxable Turnover.The State has determined that the input VAT credit on capital goods canbe claimed over 20 tax periods.

VAT dealer estimated that the machinery will be used to produce 75%taxable and 25% non taxable turnover.

The input VAT credit available for setoff in same period and input VATcredit deferred is illustrated below.

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Purchase Price of Machinery Rs 10,00,0000VAT @ 4% Rs 40,000Input VAT Credit is 40000 x ¾ = 30000

Input VAT Credit claimable in Current Tax Period Rs 1500 Input VAT Credit Deferred Rs 28000

VAT deferment schedule of capital goods considering above two transactions

Capital Good Tax Period 1 Tax Period 2 Tax Period 3 Tax Period 3 Machinery 1 2000 2000 2000 2000 Machinery 2 1500 1500 1500 1500 Total 3500 3500 3500 3500

7. Branch Transfer Out Of The State

VAT dealer transfers the goods purchased in the state to the branch situated in other state.

Purchase price of goods: Rs 10,000Vat @ 10%: Rs 1,000The Excess of Input Vat in excess of 4% that is 10-4 = 6% Input Vat Credit available on branch transfer is Rs 600

8. VAT Dealer in Exports

VAT dealer making the export sales using the purchases in the state

Purchases Rs 5, 00,000VAT Paid/ Payable Rs 40,000Export Sales Rs 8, 00,000

Input VAT Credit Rs 40,000

1. The export sales are treated as zero rated sale with respect to State VAT Act and included in the Taxable turnover

2. The Input VAT Credit Can be Used to Setoff of any Output VAT Payable,the balance of input credit not claimed will refunded.

3. The same Illustration can be used for Deemed Sales and supply to EOU.

9. Dealers in Composition Scheme

VAT dealer opted for the composition schemePurchases during the Tax Period Rs 5,00,0000VAT Paid Rs 40,000Sales Rs 10, 00,000Input VAT Credit 0Out VAT Payable (Composition Rate @ 1%) Rs 10,000

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1. The Input VAT credit is not available as the dealer opted for thecomposition Scheme

2. Output VAT payable will be calculated on the total sales of the periodusing the composition rate.

10. Dealers Executing The Composite Works Contracts

1. VAT Dealer engaged in executing the composite works contract maintains proper records of labour & services The Turnover of the works contract of the tax Period Rs 5, 00,000Charges towards labour, services and other charges Rs 2, 00,000Taxable Turnover of Works Contracts Rs 3, 00,000Purchases during the tax period Rs 8, 00,000Input VAT Paid/ Payable Rs 32,000

Input Tax Credit (Prescribed 90 % for claiming input VAT) Rs 28,800Out VAT Rs 37,500Output VAT Payable RS 8,700

I. There is a prescribed percentage in some states, thepercentage of the input VAT which is allowed as input VATcredit

II. VAT dealer engaged in executing the composite workscontract not maintaining proper records of labour & services

2. VAT Dealer engaged in executing the composite works contract does not maintain proper records of labour and services

The turnover of the works contract of the tax period Rs 5, 00,000

Purchases during the tax period Rs 8, 00,000Input VAT Paid/ Payable Rs 32,000

Calculation of taxable turnove Gross Turnover Rs 5, 00,000Standard Deduction (@ 25%) Rs 1, 25,000Taxable Turnover Rs 3, 75,000

Input Tax Credit (Prescribed 90% of Input VAT ) Rs 28,800Out VAT Rs 46,875Output VAT Payable RS 18,075

There is a prescribed percentage in some states, the percentageof the Input VAT which is allowed as input VAT credit.

The standard deduction in this case of composite works contractis 25%, the Standard Deduction depends on the type of workand it differs from state to state.

11 Dealer engaged Lease Transactions

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VAT dealer engaged in lease transactions.

Machinery worth is given on lease with monthly lease of Rs 10000. VAT dealer received three lease rentals during the tax period.

Taxable Turnover for the period lease transactions Rs 30000Output VAT Payable (Tax Rate 12.5%) Rs 3750

12 Debit notes/Credit notes

VAT dealer has purchased goods worth RS 1, 00,000 and the Input VAT @ 10%was Rs 10000The Dealer has been issued a debit note of Rs 11,000 (Including the Input VATof Rs 1,000)The good s cost should be increased with Rs 10,000 and input Tax credit with Rs1,000 with following entry

Debit CreditPurchases/Fixed Asset 10000Purchase Tax/ VAT Receivable /VAT Deferred

1000

Vendor Account 11000

Incase of Credit notes the above Entry will be reversed

1. The Time limit for Claiming the Input Tax Credit on Debit notes is fixed bythe State.

13. Adjustments in case of Changes in the usage

VAT dealer has purchased goods worth RS 1, 00,000 and the Input VAT @ 10%was Rs 10000 The dealer expected the usage of the goods in taxable turnover and non taxableturnover as 50% and 50%, thereon claimed Rs 5000 ( 50% of 1000) as tax credit

At the end of tax period the actual usage was 60% to taxable turnover and 40%for non taxable turnover

The eligible amount of input tax credit is Rs 6000, amount of input tax creditshould be increased with Rs 1000 and decrease the cost of goods with Rs 1000

Debit CreditPurchase Tax/ VAT Receivable/VAT Deferred

1000

Purchases/Fixed Asset 1000

Incase of decrease in tax credit the above entry is reversed assuming the eligible Input Tax Credit is Rs 4000

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Note:In case there is no balance respective in the Purchase Tax/ VAT Receivable/VAT Deferred the amount will be transferred to VAT Payable Account

14 Adjustments in Tax Credit incase of Loss or Destructions

VAT dealer has purchased goods worth RS 1, 00,000 and the Input VAT @10% was Rs 10000The VAT dealer claimed the total input tax Rs 10000 as input tax credit andsubsequently the goods were destroyed/ lost.

Dealer has to reverse the input tax credit claimed.

Debit CreditLoss due to goods Loss/Destroyed

10000

Purchase Tax/ VATReceivable/VAT Deferred

10000

Note:In case there is no balance respective in the Purchase Tax/ VAT Receivable/VAT Deferred the amount will be transferred to VAT Payable Account.

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Microsoft ® Business Solutions –Navision ® 4.0- Statement of TDS.

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Table of Contents

Tax Deduction at Source ................................................................................................. 3

Statement of TDS ............................................................................................................ 3Creation of new account in Chart of Accounts ................................................................. 5Number Series setup ........................................................................................................ 5Setup for Tax Deduction at Source .................................................................................. 6

Accounting Period ....................................................................................................... 7T.A.N. Nos. ............................................................................................................... 10Field Description: ...................................................................................................... 11TDS groups ............................................................................................................... 11TDS Nature of Deductions (NOD) ............................................................................. 12TDS Assesse Codes ................................................................................................... 13TDS details ................................................................................................................ 14

TDS party master (Parties)......................................................................................... 15Concessional codes .................................................................................................... 16TDS NOD lines ......................................................................................................... 16Correction Type setup ............................................................................................... 18

Company level setup ..................................................................................................... 19General ledger setup ...................................................................................................... 20Vendor card ................................................................................................................... 21Transactions .................................................................................................................. 23

Vendor transactions ................................................................................................... 24Direct invoices using general journal ......................................................................... 24Direct invoices using invoices ................................................................................... 26

PO based invoices using orders.................................................................................. 27Advance payment using payment journal ................................................................... 29Payment of TDS amount to government .................................................................... 30TDS adjustment Journal ............................................................................................ 32TDS Update Register ................................................................................................. 33Challan Register: ....................................................................................................... 34

Generate Certificates Numbers. ............................................................................. 36Generate Form 26Q ................................................................................................... 39Generate Form 27Q ................................................................................................... 42Generate eTDS .......................................................................................................... 45

Correction in Statement of TDS: ................................................................................... 50

Generate Revised 26Q / 27Q ..................................................................................... 56Generate Revised eTDS................................................................................................. 59Example 1: .................................................................................................................... 63

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Tax Deduction at Source

Tax deduction at source (TDS) is one of the methods of collecting income tax from theAssessee. Such collection of tax is effected at the source when any specified type of income arises or accrues to any one. The Income-Tax Act enjoins on the payer of suchincome to deduct a stipulated percentage by way of income tax and pay only the balanceamount to the recipient. The tax, so deducted at source by the payer has to be deposited tothe credit of Central Government within the specified time. Such deduction is deemed tobe payment of income tax by the recipient at the time of his assessment.

Incomes, which are subjected to T.D.S:SalaryInterestDividendInterest on securitiesWinnings from lotteryHorse racesCommission and brokerageRentFees for professional and technical servicesPayments to non-residents

When will Tax be deducted?The Income Tax Act specifies that tax deduction will occur on crediting a person saccount or, on payment, whichever is earlier.

Statement of TDS

The person, deducting tax at source will submit a quarterly statement to the income taxauthority (or the person authorized by such authority) in respect of tax deducted at sourceon or after April 1, 2005.

Following Forms (Quarterly statements) are used for this purpose.Form 26Q: This Form is used for TDS other than salary transaction to residents.

Form 27Q: This Form is used for TDS other than salary transaction to non-residents.

Quarterly returns should be submitted within 15 days from the end of each quarter. TheIncome Tax Authority will in turn furnish an annual statement of tax deducted to theassessee in Form No. 27 AS.

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As per the Income Tax laws, entities (both corporate and non-corporate deductors)making payments to third parties (deductees) are required to deduct tax at source (Taxdeducted at Source – TDS) from these payments and deposit the same at any of thedesignated branches of authorized banks. They should also furnish TDS returnscontaining details of deductees and bank where TDS amount is deposited with the

income tax department (ITD). With effect from 01.04.2005 every deductor must file“Quarterly Statement of TDS” under Form 26Q an d Form 27Q (for Non-Residents).Deductor furnishing returns in electronic form (e-TDS return) have to furnish a controlchart – Form “27 A” in physical form along with the e -TDS return.

Payment other than salary to a resident :

FormNo.

Description Due Date

26Q For the quarter ending ,June 30 July, 1526Q For the quarter ending, September,30 October,15

26Q For the Quarter ending ,December,31 January,1526Q For the quarter ending ,March 31 June, 15

Payment other than salary to a Non-resident :

FormNo.

Description Due Date

27Q For the quarter ending ,June 30 July, 14,27Q For the quarter ending, September,30 October, 1427Q For the Quarter ending ,December,31 January, 1427Q For the quarter ending ,March 31 June, 14

A user needs to define certain basic setups to manage the TDS transactions in Navision4.0. Define setups at following levels.

Creation of new account in Chart of AccountsNumber Series setupSetup for Tax Deduction at Source.Setup on Vendor card.Company Information setupGeneral Ledger setup

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Creation of new account in Chart of Accounts

The user needs to create balance sheet liability accounts for TDS transactions. The userhas to create one account for each TDS group under which company deducts tax.

NAVIGATION : F INANCIAL M ANAGEMENT →G ENERAL L EDGER → C HART OFACCOUNTS .

Create the necessary GL accounts for all the TDS Payables accounts.

For example,

TDS Payable Account for Rent is 5930.TDS Payable Account for Professional Services is 5940.TDS Payable for Contractors is 5941

Number Series setup

TDS certificates are reports generated in Navision and issued to vendors. The user needsto create separate number series for TDS Certificates.

NAVIGATION : ADMINISTRATION → APPLICATION SETUP → G ENERAL → NO . SERIES .

The Number Series you create will be then linked to each TDS group .

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Setup for Tax Deduction at Source

The user has to define the setups for TDS in Financial Management Module. Varioussetups for TDS are:

Accounting PeriodT.A.N Nos.GroupsNature of DeductionsAssessee CodeDetailsPartiesConcessional CodesNOD LinesCorrection Codes

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Accounting Period

TDS Accounting Periods are required to generate TDS transactions. The user needs tospecify TDS Accounting Periods while filing Form 26Q / 27Q. The system will show anerror, if the TDS Accounting Period is not setup for the transaction date.

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Navigation: Financial Management → Setup→ Tax deducted at source→Accounting Period .

Field-Description

Number : This field shows the serial number of account period, and is generated by thesystem.

Starting Date & Ending Date: To create the Accounting periods for TDS, click CreateYear button.

Closed: Once the annual report is filed with the government, the user can close theaccounting period of TDS. To close the accounting periods of TDS, click Close Yearbutton . Once the year is closed, the „Closed field gets marked true.

To create the Accounting Periods for TDS as shown in the window, click Create Yearbutton.

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Field Description:

Starting Date: Define the starting date for the TDS Accounting year.

Ending Date: Define the ending date for the TDS Accounting year.

Create Quarter

The user can create the Quarters for the selected Financial Year by clicking, “Create Quarter” .

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On c licking „Create Quarter , TDS Period setup window will be opened as shown below.

The user can define the Quarters for selected financial year in this window.

Field Description

Quarter: Define the code for the Quarter.

Starting Date: Define the Starting Date of the Quarter.

Ending Date: Define the Ending Date of the Quarter

The system will use this setup, at the time of filing of eTDS and revised eTDS for aspecific Quarter.

T.A.N. Nos.

Tax Deduction Account numbers allotted to a company may be more than one dependingon the number of branch locations from which the company files its resources. You need

to capture all the account numbers, allotted to a company.

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Navigation: Financial Management Setup Tax Deducted At source T.A.N.Nos.

Field Description:

Code: Define the T.A.N. Numbers in this field.

Description : Type the description of the Code.

TDS groups

Navigation: Financial Management Setup Tax Deducted at Source GROUPS.

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Field Description :

TDS Group : TDS Group defines the nature of transaction for which TDS is applicable.Select the TDS Groups from the drop down list.

Effective Date : Specify the effective date from which the TDS threshold will beapplicable.

TDS Section : Select the TDS section applicable as per the Income Tax Act, 1961 fromthe drop down list.

TDS Threshold Amount : Define the threshold limit for each TDS Group. Deduct TDSonly if, the total transaction with the assessee, exceeds the threshold limit in the financialyear.

Surcharge Threshold Amount : Define the surcharge threshold limit for each TDS

Group. Deduct Surcharge only if, the total transaction with the assessee exceeds thethreshold limit in the financial year.

Per Contract Value : Define the Per Contract Value for each TDS Group, where it isapplicable. TDS will be deducted only if, the total transaction with the assessee exceedsthe per contract value in a single transaction of threshold amount in a financial year.

Non-Resident Payments : Place a check mark here if, the relevant group deals with non-residents.

TDS Account : Select the TDS Payable account from the Chart of Accounts.

No. Series : Attach a Number Series to the TDS Group for the auto generation of TDSCertificate Number for a particular TDS Group. Define the TDS Group and NumberSeries along with the effective date separately for each Financial Year. The numbergenerated, will be useful in keeping a control over Form 16A Certificate.

TDS Nature of Deductions (NOD)TDS Nature of Deductions are more specific to the TDS groups defined above. Nature of Deduction (NOD) s are different services on which TDS is applicable. Specify the rates

of tax deduction against each TDS NOD in TDS details form.

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Navigation: Financial Management Setup Tax Deducted at source Nature of Deductions

Field Description :

Code : Define the NOD code in this field.

Description : Enter the description of the Nature of Deduction (Service).

TDS Group : Select the TDS Group from the drop down list to which the particularnature of deduction belongs. For example, NOD Advertisement, Contractors & Sub-Contractors fall under the TDS Group „Contractor .

Category : Classify NOD Advertisement, Contractors, and Sub-Contractors by categoryA, C, S respectively when filing of return under Section 26C.

TDS Assesse Codes

Income Tax Act 1961 defines 'Assesse' as a person by whom any tax or any other sum of money is payable under this Act. The rates of TDS are different for different types of Assesse, hence you need to classify them here.

Navigation: Financial Management Setup Tax Deducted at Source AssesseCodes

Define the various assesses coming under the TDS purview.

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Code : Define the Assesses Code here. For example IND, COM.

Description: Type the Description of the Assesses Type here. For example Individual,Company

Type: Select the Assesse Type as Company or Others from the drop down list.

TDS details

Define the TDS rates for each NOD and assessee type in the TDS details forms. The rates

of tax deduction may vary for each financial year

Navigation: Financial Management Setup Tax Deducted at Source Details

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Field Description :

TDS Nature of Deductions : Select the Nature of Deduction from the look up button.

TDS Assessee Code : Select the Assessee Code.

TDS Group: TDS Group will be defaulted automatically depending on the NOD setup.

Effective Date : Specify the effective date from which the TDS rate becomes applicable.

Concessional Code : Select the code if the rate is concessional.

TDS % : Define the base TDS rate here.

Surcharge % : Specify the surcharge rate, if applicable, which is computed on the TDSAmount

eCess % : Specify the eCess, if applicable. As per the rules, eCess computation is on theaggregate of TDS inclusive of surcharge.

TDS party master (Parties)

TDS parties are one time parties or vendors, which are not part of our regular vendormaster.

Navigation: Financial Management Setup Tax Deducted at Source Parties

Field Description :

Code: Define the Party Code.

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Description: Enter the name of the Party.

Address, Address2: Enter the P arty s Address.

State: Enter the name of the state.

Postal Code: Enter the relevant Postal code here

PAN No: Enter the Permanent Account Number of the Party.

PAN Reference No.: If the PAN Number is not available, enter the PAN ReferenceNumber in this field.

Concessional codes

Define concessional codes for cases authorized for concessional rates exclusively by thegovernment. You may give concessional rates for these codes in TDS details.

Navigation: Financial Management Setup Tax Deducted at SourceConcessional Codes .

Field Description :

Code: Define the Concessional code here.Description: Enter the description of the Concessional Code here.

TDS NOD lines

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Define NOD lines for each Vendor / Customer and Party that is liable to Tax deduction atSource.

Navigation: Financial Management Setup Tax Deducted at Source NODLines

This is master to link the Vendor / Customer / Party with various NODs so that NODlinked to the Vendor / Customer / Party is available for TDS transactions. Attach one ormore NODs to a Vendor / Customer / Party.

Field Description :

Type: Select the Type from Vendor / Customer / Party from the drop down list.

No: Select the Vendor / Customer / Party number.

Assessee Code: Select the Assesse Code from the lookup list.

Nature of Deduction: Select the NOD, depending on the kind of services provided byVendor / Customer.

Concessional Code: Specify a concessional code if a concessional rate is applicable.

Concessional Form No.: Enter the Concessional Form Number of Vendor / Customer / Party.

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Monthly Certificate: Check this field to generate a certificate every month. Leave thisfield blank to generate an annual certificate.

Threshold overlook : If user wants to deduct TDS even though the threshold limit is notcrossed for the customer then he has to check mark the threshold overlook field.

Surcharge overlook : If user wants to deduct surcharge even though the surchargethreshold limit is not crossed for the customer then he has to check mark Surchargeoverlook field.

Correction Type setup

Under Financial Management → Setup → TDS → Correction Codes

Code: - Define Codes of different types of corrections that can be done at the time of revised returns.Description: - Type the details of Correction Codes.Sorting Order: - Define the sorting order of the correction codes.

The system will use the sorting order for corrections defined in the setup to file therevised e-TDS returns. Correction statements (batches) in a multiple batch correctionstatement have to necessarily be in the sequence given below:

C1, C5, C2, C3, C9

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Company level setup

Ad ministration → Application Setup → General → Company Information .

Enter basic information about the company, such as the name, addresses, post code, state,country, std code/phone number etc.

The user has to define PAN, TAN, Circle, Ward, Assessing Officer details in CompanyInformation Setup.

TAN No: TAN number will be selected from the TAN master.

Assessing officer number

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This field will accept alphanumeric characters.

Circle numberThis field will accept alphanumeric characters.

Ward numberThis field will accept alphanumeric characters.

Note: It is mandatory to enter the TAN Number, since all TDS entries are generatedbased on this number.

Company Status: Define the status of the company as Public Limited/PrivateLimited/Government or Others.

General ledger setup

Administration → Application Setup → Financial Management → General LedgerSetup

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TDS Rounding Precision: The field defines the size of the interval that will be used forrounding TDS amounts. The field has a default value of 1.00, which means all thecomponents of TDS (viz. TDS amount, eCess amount, Surcharge Amount etc) will berounded off to whole numbers individually.

TDS Rounding Type: Here you can specify whether TDS amount will be rounded up ordown or nearest. The program uses this information together with the interval forrounding.

Vendor card

Financial M anagement→ Payables → Vendor Tax Information

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P.A.N. No: For deduction of TDS from Vendor, PAN numbers for each vendor iscaptured in the Vendor C ard. Vendor s PAN N umber has to be quoted in Annexure of Statement of TDS and Quarterly return.

PAN Status: Select PANAPPLIED/ PANINVALID/ PANNOTAVBL to define thestatus of P.A.N. Number.

P.A.N. Reference No: The user can enter PAN Reference Number, if PAN is applied bythe Vendor.

State:

Financial Management Setup Sales Tax States

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Code: Define the Code for each state.Description: Type the description for each state code.State code for eTDS: Define the state code, to be used for e-TDS filing with the taxauthority.

Transactions

TDS functionality is available on the following:1. General Journal.2. Purchase Invoice.3. Purchase Order.4. Payment Journal.5. Purchase Journal

The following fields are available on the Purchase Order, Purchase Invoice, GeneralJournal, Payment Journal for TDS calculations.

TDS Party Type : Select the party type from the drop down list.

TDS Party : Select the Vendor / Customer / Party Number from the list.

TDS Assessee Code : The assessee code is defaulted automatically from the NOD Partymaster.

TDS Nature of Deduction : Select the Nature of Deduction on which TDS is to becomputed.

TDS%: The TDS rate is defaulted automatically from TDS Details Master based on thecombination of Nature of Deduction and Assessee Code.

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TDS Amount : The TDS Amount is computed automatically by the system.

Surcharge %: The Surcharge rate is defaulted automatically from TDS Details Master,based on the combination of nature of deduction and assessee code.

Surcharge Amount : The Surcharge Amount is computed automatically by the system.

TDS Amount including Surcharge: This field displays the total of TDS and Surcharge.

eCess %: The eCess rate is defaulted automatically from TDS Details Master based onthe combination of nature of deduction and assessee code.

eCess on TDS Amount : The eCess Amount is computed automatically by the system.

Total TDS Including eCess : This field displays the total amount of TDS to be deductedfor the transaction.

When you select the TDS Nature of Deduction from the look up button TDS Rate isdefaulted automatically from TDS Details Master, based on the combination of nature of deduction and Assesses Code. The other automated fields on a transaction are

TDS AmountSurcharge %Surcharge Amount:TDS Amount including SurchargeEducation CesseCess %.

eCess on TDS Amount:Total TDS Including eCess

Vendor transactions

Direct invoices using general journal

Tax is deducted on Vendor Invoices against which no advance payment has beenreceived. When you make invoice transactions you will make a few additional entries,apart from those you enter regularly, while making an Invoice.

Navigation: Financial Management →General Ledger → General Journals

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Enter the Posting DateSelect Document Type as Invoice Enter the External Document No as Ven Select TDS Party Type as Vendor Select the TDS PartyDo not Select Account Type and Account No as these are automatically populatedSelect TDS Nature of Deduction as CONT Select the T.A.N NoEnter AmountEnter Balancing Account

The following fields are automated from the setups predefinedTDS Assesse Code TDS %TDS Amount:Surcharge %:

Surcharge Amount:TDS Amount including Surcharge:.eCess %eCess on TDS Amount :Total TDS Including eCessPost the Journal

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While making Invoices using General Journal / Purchase Journal, make sure that theDocument Type is selecte d as „Invoice and the Invoice Amount is denoted with anegative (-) sign, as the vendor has to be credited with the amount.

Direct invoices using invoices

Tax is deducted on Vendor Invoices against which no advance payment has beenreceived. While making invoice transactions you will make a few additional entries apartfrom the regular entries.

Navigation: Financial Management→ Payables → Invoices

Select Buy from Vendor NoEnter Posting DateEnter the Vendor Invoice NoOn the shipping tab select Location Code On the Lines Select account Type G/L account. Select No .Enter Quantity Select TDS Nature of DeductionEnter Direct Unit Cost Excl. VATTo compute the TDS value, on Functions menu button, click Calculate TDS.

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The following fields are automated from the setups predefined

TDS Assesse Code TDS %

TDS Amount:Surcharge %:Surcharge Amount:TDS Amount including Surcharge:.eCess % on TDS:eCess on TDS Amount :Total TDS Including eCess:Post the Invoice.

PO based invoices using orders

Tax is deducted on Vendor Purchase Orders against which, no advance payment has beenreceived. When you make a PO, you will make a few additional entries apart from theregular entries.

Navigation: Purchase→ Planning →Orders

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Select Buy from Vendor No.Enter Posting DateEnter the Vendor Invoice NoOn the Shipping tab select Location Code On the Lines Select account Type G/L account. Select Account No . Enter Quantity Select TDS Nature of DeductionEnter Direct Unit Cost Excl. VATTo compute the TDS value, on Functions menu button, click Calculate TDS.

The following fields are automated from the setups predefined:

TDS Assesse Code:TDS %:

TDS Amount:Surcharge %:Surcharge Amount:TDS Amount including Surcharge.eCess % on TDS Amount:eCess on TDS Amount :Total TDS Including eCess:Release and Post the PO.

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Advance payment using payment journal

Tax is deducted on Vendor Advance Payment. When you make an advance payment you

will make a few additional entries apart from the regular entries

Navigation: Financial Management→ Payables →Payment Journal

Select Document Type as Payment Enter Document no Select TDS Party Type as Vendor Select the TDS PartyDo not Select Account Type and Account No as these are automatically populated.Enter the External Document NoSelect TDS Nature of deductionSelect the T.A.N No from the look up buttonEnter Amount


TDS Assesse Code:TDS %:TDS Amount:Surcharge %:Surcharge Amount:

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TDS Amount including Surcharge:.eCess %:eCess on TDS Amount :Total TDS Including eCess:Now Post the Journal .

Payment of TDS amount to government

The TDS that you have deducted on various transactions described above has to befinally deposited with the government. Payment of TDS deducted can be done throughGeneral Journal in General Ledger Module

Navigation: Financial Management→ General Ledger → General Journal→Functions → Pay TDS

On Functions menu button, click Pay and then select TDS.

A form opens that will show all the TDS entries.

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Select the field or fields on which the filters need to be put.

The form will show the TDS entries for the selected filters onlySelect the entries for which TDS amount needs to be paid.Click Pay button of the screen, so that the total of the selected entries istransferred to the General Journal.Post the journal.

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Navigation: Financial Manage ment →General Ledger →Periodic Activity →TaxDeduction at Source.

TDS adjustment Journal

Adjustment Journals are used for correcting the TDS amount that is already deducted butnot yet paid to the government

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Navigation: Financial Management→ General Ledger → Periodic Activities → Taxdeducted at source → TDS Adjustment Journal

Click look up button of the “Transaction No ” field on the header.Select the Transaction you have generated for TDS Parties or any other vendor.Change the details to correct the transaction. That is you can increase or decreasethe TDS rate, deducted and the adjustments would be made accordingly.Post the Journal.

The revised TDS Amount is now updated in the relevant GL accounts for TDS Payableand Vendor Account.

TDS Update Register

TDS Update Register is maintained to keep track of all the TDS payments made to thegovernment with relevant Challan Details. The Challan Number, Challan Date, and Bank Name are updated using this functionality for each transaction to be printed on TDS

certificate .

Navigation: Financial Management →General Ledger → Periodic Activities →TaxDeduction at source →Update TDS Register

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On Functions menu button, click Update Challan Details.The user can give the Challan Details in the window, given below.

Challan Register:

A form is created under Financial Management / Periodic Activities / TDS / ChallanRegister

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The user can update Challan Register for the selected Challan Detail.

On Register menu button, click Update Challan Register.

System will open a new form and allow to enter Interest Amount, Others, and Paid bybook entry fields for the selected Challan Number.

If the user other than govt. organization tries to checkmark „Paid by Book Entry field thesystem will give following error.

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Generate Certificates Numbers .

TDS Certificate Number is used to generate the Certificate Number for the Certificates tobe issued to the Vendors for the TDS deducted and paid on transaction of various TDSGroups.

Navigation: Financial Management General Ledger → Periodic Activities →TaxDeduction at Source → Generate Certificate Nos.

On Functions menu button, click Generate Certificate Nos .

This will open a form on which the filters have to be entered to generate certificatenumbers for Vendors / Customer / Parties

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Party Type : The type of the Party is to be selected here. The various Party Types areVendor, Customer, and Party.

Party: Select the individual Vendor / Customer / Party.

TDS Group: Specify the TDS Group.

Start Date: Specify the effective date from which the TDS certificates are to begenerated. If monthly certificates are to be generated, specify the first day of the month asStart Date. In case of yearly certificate specify 1st April (01/04/year) as Start Date.

End Date: Specify the end date to which the TDS certificates are to be generated. If monthly certificates are to be generated, specify the last day of the month as End Date. Incase of yearly certificate specify 31st March (31/03/year) as End Date.

Monthly Certificate: Place a check mark in this field, if generating Monthly Certificate.

The certificate will be generated based on the above specified filters. The correspondingTDS entries are also updated with the Certificate No. and Certificate Dates respectively.

To generate Form 16A, click on Functions menu button TDS 16A.

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Generate Form 26Q

Navigation: Financial Management General Ledger → Periodic Activities →TaxDeduction at Source → Generate form 26Q.

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Use this option to generate form 26Q in print format.

Fields Required:

1. T.A.N Location: An existing TAN Location is selected here for which theReport 26Q will be generated.

2. Report Frequency: Choose Quarter (Quarter 1 or Quarter 2, or Quarter 3 orQuarter 4) from the drop down option.

3. Choose Financial Year: Define Starting Year and End Year. Example: ForFinancial Year 2005 -2006, starting year is 2005 and ending year is 2006.

4. Full Name: The name of the person, whose name will be printed on the

Report 26Q needs to be entered here.5. Designation: The designation of the person, whose name will be printed onthe Report 26Q needs to be entered here.

6. Printing date: The date on which the Report 26Q will be printed is enteredhere.

After mentioning all the above fields, click Preview button. System will show thePrint Preview of form 26Q as shown below.

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Generate Form 27Q

Navigation: Financial Management General Ledger → Periodic Activities →TaxDeduction at Source → Generate form 27Q.

Use the above option to generate form 27Q in print format.

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Here the user needs to select e-TDS (26Q or, 27Q) from the dropdown return that needsto be generated. On selecting Generate eTDS a new form will open:

.

Field Description:

1.File Name: Select the location of the e-TDS file to be generated and stored.2. TAN Location: An existing TAN Location is selected here for which the

Report 26Q will be generated.3. Report Frequency: Choose Quarter (Quarter1 or Quarter 2, or Quarter 3 or

Quarter 4)

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4. Financial Year: Define Starting year and End year. Example: For FinancialYear 2005 -2006, starting year is 2005 and ending year is 2006.

5.Full Name: The name of the person, whose name will be printed on the Report26Q needs to be entered here.

6.Designation: The designation of the person, whose name will be printed on the

Report 26Q will be entered here.7.Printing date: The date on which the Report 26Q will be printed is enteredhere.

This process will create e-TDS return in „txt file on the selected path for a period andalso generate 27A report as per the specified format.

Format of form 27A.

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To run this process, generation for 26Q report should be run, at least once. However,

the user has the option to run only the 26Q / 27Q report without e-TDS. The fileshould be validated through the File Validation Utility (FVU) before furnishing itwith the government.

After filing the return with the government the user will click File eTDS to update thefile status to mark the entries as Filed.

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This option requires following information to be entered by the user:QuarterFinancial yearDate of filingProvisional Receipt No.

„File eTDS will run only under the following conditions:The Report selected is either Report 26Q or Report 27QThe quarter selected in the field „Period is in open status i.e., the „eTDS Filed for the Report selected for the relevant period is not marked.

System will capture the following:If filed ( Yes or No)Date of filing

Return Status will show the user, which e-TDS returns and Revised Returns have beenfiled. The data will be displayed according to Financial Year and Quarters.

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User can view all the Previous RRR No. s defined for the quarter through the lookupprovided.

Correction in Statement of TDS:

There are six different types of Correction Statements that can be furnished by thedeductor for various types of correction. These are listed below.

C1: Correction in Deductor / Collector Details (excluding TAN)C2: Correction in Deductor/Collector (excluding TAN) and / or Challan DetailsC3: Correction in Deductor/Collector (excluding TAN) and / or Challan Detailsand / or Deductee DetailsC5: Correction of PAN of Deductee.C9: Addition of Challan(s)Y: Cancellation of statement to be made for rectification of Deductor/CollectorTAN

In a C1 correction statement a deductor can update its PAN, name, demographic details,responsible person s details, type of deductor. Details mentioned in the regular statement

or last correction statement furnished will be updated with the details provided in thecurrent correction statement. Hence fields where no corrections are required shouldcontain values as mentioned in the regular or last correction statement.

A C2 correction statement can be furnished when:There are corrections only in challan detail (CD) records OR

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There are corrections in challan detail (CD) records and in deductor details(except TAN) (BH), like PAN, name, demographic details, responsible person sdetails, type of deductor, etc.

A C3 correction statement can be furnished when:There are corrections only in deductee detail (DD) records or,There are corrections in deductee detail (DD) records and challan detail (CD)records and/or deductor details (except TAN) like PAN, name, demographicdetails, responsible person s details, type of deductor, and so on.

Details mentioned in the regular or last correction statement furnished will be updatedwith the details provided in the current correction statement.

A C5 correction statement can be furnished when:There are updations in deductee PAN i.e. a valid 10-digit PAN to be replaced inplace of PANINVALID, PANNOTAVBL and PANAPPLIED or

A valid 10-digit deductee PAN stated in the regular or last correspondingstatement to be replaced with another valid 10-digit PAN.

Details mentioned in the regular or last correction statement furnished will be updatedwith the details provided in the current correction statement.

A C9 Correction Statement can be furnished if;A new challan along with underlying deductee records (if any) is to be added to theregular statement.

A Y Correction Statement can be furnished if; there is a change in the TAN number of the deductor/collector.

Various types of Corrections Statements are C1, C2, C3, C5 and C9. They can befurnished as a single statement. Statements with multiple corrections are called“ Multiple Batch Correction S tatement” . Each type of correction in a Multiple BatchCorrectionStatement is termed as “ Batch”.

“Multiple Batch Correction S tatement” can contain various types of corrections (Batches) pertaining to corrections in the same regular statement furnished (sameTAN, Form no., Period, F.Y., A.Y.) only. Example, if there are different types of corrections in different Forms (Form 24 Q / 2 6 Q / 27 EQ ) for the same TAN andPeriodicity, separate files with respective batches will be furnished for each kindof form.

A “ Multiple Batch Correction S tatement” will always contain a File Header (FH)record. There will be multiple Batch Header (BH) records, depending on thenumber of batches (C1, C2, C3, C5, C9). There are various combinations in whicha Multiple Batch Correction Statement can be prepared and furnished.

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A Multiple Batch Correction Statement can be furnished only for C1, C2, C3, C5 and C9type of Correction S tatements. „Y type of Correction Statement should be furnishedseparately. It cannot be part of Multiple Batch Correction Statement.

In case of a Multiple Batch Correction Statement, separate provisional receipts will begenerated for each batch within the statement. For example if there are three batches likeC5, C3, and C9 then, three separate provisional receipts will be generated.

General Ledger Periodic Activities Tax Deducted at Source Correct 26Q/27QEntries

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If Correction is required in Deductor Record, following form will be opened.

The user can make changes in Editable fields of this form and then click Update Entriesin Function menu button. This will update the 26Q/27Q entries with new values.

If correction is required in Challan Details, following form will be opened.

The user can make changes in Editable fields of this form and then click Update Entriesin Function menu button. This will update the 26Q/27Q entries with new values.

If correction is required in Deductor s TAN Number , following form will beopened.

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User can make changes in Editable field i.e. only in TAN number of this form and click Update Entries in Function menu button. This will update the 26Q/27Q entries with newvalues.

The system will automatically identify the corrections as C1, C2, C3, C5, C9 or Y type.However, user can also modify the correction type field in individual windows.

Generate Revised 26Q / 27Q

Once the corrections are done, a form will be provided for the generation of Revised 26Q / 27Q,as:

.

Field Description:

File Name : Location of the e-TDS fileTAN Location : An existing TAN Location is selected here, for which the ReportRevised 26 Q will be generated.

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Report Frequency : Choose Quarter (Quarter 1 or Quarter 2, or Quarter 3 orQuarter 4) from the drop down option.Financial Year : Define Starting Year and End Year. Example: For FinancialYear 2005 -2006, starting year is 2005 and ending year is 2006.Full Name : The name of the person, whose name will be printed on the Report

Revised 26Q needs to be entered here.Designation : The designation of the person, whose name will be printed on theReport Revised 26Q will be entered here.Printing date : The date on which the Report Revised 26Q will be printed, isentered here.

Revised Form 26Q will be generated in the following format:

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Generate Revised eTDS

Navigation: Financial Management General Ledger → Periodic Activities →TaxDeduction at Source → Generate Revised eTDS.

After doing specific corrections the user can generate e-TDS through “Generate revisede-TDS ” for 26Q / 27Q.

A form will be opened where the user will define various filter conditions for thegeneration of Revised 26Q.

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A Multiple Batch Correction Statement can be furnished only for C1, C2, C3, C5 and C9type of Correction S tatements. „Y type of Correction Statement should be furnishedseparately. It cannot be part of Multiple Batch Correction Statement. Hence for acorrection entry involving C1, C2, C3, C5, C9 and Y type of corrections, three different

eTDS files will be created.1. eTDS for C1, C2, C3, C5 or C9 corrections2. eTDS for Y type corrections3. eTDS for regular Y.

Revised 27A will be generated with the generation of Revised e-TDS.

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After preparation of the Correction Statement the same is to be validated through the FileValidation Utility (FVU). The procedure for validation is the same as that for regularstatements. Thereafter, furnish the validated (.FVU) Correction Statement with a TIN-FCor directly through the NSDL web-site (www.tin- nsdl.com).

The Revised e-TDS can be filed for a specific quarter.

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This option requires following information to be entered by the user.QuarterFinancial yearDate of filingProvisional Receipt No.

In case of a Multiple Batch Correction Statement separate provisional receipts will begenerated for each batch within the statement. For example if there are three batches likeC5, C3, and C9 three separate provisional receipts will be generated. The User can entermultiple Provisional Receipt No. s in the field above. The last Provisional Receipt No.will be used for generation of Batch Header.

System will capture the following field:If filed ( Yes or No)Date of filing

Return Status will show the user, which Revised Returns have been filed. The data willbe displayed according to Financial Year and Quarters.

User can view all the Previous RRR No. s defined for the quarter through the lookup

provided.

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Example 1:

Company ABC has received Professional Services from Vendor XYZ . XYZ raised a billfor Rs.1, 00,000/- on ABC. ABC will deduct TDS on 100000 @ 5.61% includingsurcharge and eCess.

ABC will post the following entries:

Professional Charges A/C Dr. Rs.1,00,000To TDS Payable – Services A/C Cr. Rs. 5,610To XYZ A/C Cr. Rs. 94,390

ABC will deposit TDS to Government Authority by passing the following entry.

TDS Payable - Services A/C Dr. Rs.5,610To Bank/Cash A/C Cr. Rs.5,610

ABC will make final payment to XYZ.

Entry will be.

XYZ A/C Dr. Rs.94,390To Bank A/C Cr. Rs.94,390.

ABC will issue a TDS certificate (form 16A) for Rs. 5,610 to XYZ.

Example 2:

A regular statement containing four challans / transfer voucher details where:• Challan 1 has 10 Deductee records• Challan 2 has 5 Deductee records• Challan 3 has 15 Deductee records• Challan 4 has 20 Deductee recordsis furnished.

Subsequently, there are corrections in the following records in the regular statement;• Corrections in Deductor Details• In challan 1, update CIN Details

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• In challan 3, CIN Details to be rectified and for underlying Deductee 4 incorporate 10-digit PAN instead of “PANINVALID” in the Deductee PAN field, for Deductee 10replace valid PAN with another valid PAN• In Challan 4, add a Deductee record.

An additional challan with 2 underlying Deductees to be added. There are no changes inchallan 2 or its underlying Deductee records.

The sequence of these batches (correction statements in a file) will be as follows:

− File header record (FH)− Batch Header record 1 (BH) – C5 (updation of Deductee PAN)− Challan detail record 3 (CD)− Deductee detail record 10 (DD) – update valid to valid PAN− Batch Header record 2 (BH) – C2 (updation of Challan) with batch updation indicator 1for corrections in Deductor Details.

− Challan / Transfer Voucher Detail record 1 (CD) – updation of CIN− Batch Header record 3 (BH) – C3− Challan / Transfer Voucher Detail record 3 (CD)− Deductee Detail record 4 (DD) – update PANINVALID with valid PAN− Challan / Transfer Voucher Detail record 4 (CD)− Deductee Detail record 21 (DD) – addition of a Deductee− Batch Header record 4 (BH) – C9 – addition of a Challan− Challan / Transfer Voucher Detail record 5 (CD)− Deductee Detail record 1 (DD)− Deductee Detail record 2 (DD)

If there are no corrections in Challan or Deductee Details except for updation of Deductee PAN and corrections in Deductor Details along with addition of Challan, thesequence will be: C1, C5, C9.

A Multiple Batch Correction Statement can be furnished only for C1, C2, C3, C5 and C9type of Correction S tatements. „Y type of Correction Statement should be furnishedseparately. It cannot be part of Multiple Batch Correction Statement.

In case of a Multiple Batch Correction Statement separate provisional receipts will begenerated for each batch within the statement. For example if there are three batches likeC5, C3, and C9 three separate provisional receipts will be generated.

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Microsoft ® Business Solutions –Navision ® 4.0- Tax Collection at Source

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Table of Contents

Tax Collection at Source .............................................................................................. 3

Creation of a New Account in Chart of Accounts ...................................................... 5

Number Series Setup................................................................................................... 6

Setup for Tax Collection at Source ............................................................................. 7

Customer Master ........................................................................................................ 25

Company Information Setup ...................................................................................... 26

General Ledger Setup ................................................................................................ 27

State ............................................................................................................................. 28

Customer Transactions .............................................................................................. 29

Direct Invoices using General Journal .................................................................. 31

Direct Invoices using Invoices ............................................................................... 32

Sales Order based Invoices using Orders ............................................................ 33

Advance Payment using Cash Receipt Journal ................................................... 35

Adjustment of Advance Payment against Invoice / Order .................................. 36

Credit Memo through Return Order ...................................................................... 37

Payment of TCS amount to government .............................................................. 39

TCS Adjustment Journal ............................................................................................ 41

Update TCS Register ................................................................................................. 43

TCS Challan Register ................................................................................................. 45

Generation of TCS Certificate ................................................................................... 46

Form 27EQ .................................................................................................................. 50

Generate eTCS ........................................................................................................... 51

Correct 27EQ Entries ................................................................................................. 54

Revised Form 27EQ ................................................................................................... 59

Generate Revised eTCS............................................................................................ 61

Reports ........................................................................................................................ 64

Appendix ...................................................................................................................... 68

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Tax Collection at Source

„Tax Collection at Source (TCS) is one of the methods for tax collection by the

government. It follows the principle „You pay while you earn . While „Tax De ducted atSource (TDS) requires the payer to deduct tax at source and remit the tax to thegovernment, TCS requires the receiver/seller to collect tax at source and remit it to thegovernment. The purpose of this provision is to eliminate tax evasion in certain trades.

Section 206C (1) says, “Every person, being a seller shall, at the time of debiting of theamount payable by the buyer to the account of the buyer or at the time of receipt of suchamount from the said buyer in cash or by the issue of a check or draft or by any other mode, whichever is earlier, collect from the buyer of any goods of the nature specified, asum equal to the percentage specified of such amount as income tax. ”

Section 206C (1C) says “Every person, who grants a lease or a licen se or enters into a

contract or otherwise transfers any right or interest either in whole or in part in anyparking lot or toll plaza or mine or quarry, to another person, other than a public sector company for the use of such parking lot or toll plaza or mine or quarry for the purpose of business shall, at the time of debiting of the amount payable by the licensee or lessee tothe account of the licensee or lessee or at the time of receipt of such amount from thelicensee or lessee in cash or by the issue of check or draft or by any other mode,whichever is earlier, collect from the licensee or lessee of any such license, contract or lease of the nature specified, a sum equal to the percentage specified, of such amountas income tax. ”

Specified Goods for which TCS is Applicable

The Seller of the following products has to collect the tax at source:1 Alcoholic liquor for human consumption2 Tendu leaves3 Timber obtained under forest lease4 Timber obtained by any mode other than a forest lease5 Any other forest produce not being timber or tendu leaves6 Indian Made Foreign Liquor 7 Scrap

Specified Leases, Licenses or Contracts for which TCS is Applicable

The grantor of the following leases, licenses or contracts has to collect the TCS:

1 Parking Lot2 Toll Plaza3 Mining and Quarrying

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Collection of Tax

TCS has to be collected by the seller, at the time of debiting of the amount payable bythe buyer to the account of the buyer or at the time of receipt of such amount, from thebuyer in cash or by issue of check/draft or by any other mode, whichever is earlier.

Deposition of Tax

TCS must be deposited within one week from the last day of the month in which the taxwas collected at source through ITNS 281.

Issuance of Certificate

The certificate for TCS is to be issued in Form No. 27D. The certificate should be issuedwithin a period of one month from the end of the month in which tax is calculated, wheremore than one certificate is required to be furnished to a buyer for tax collected at source

in respect of the period ending on the September 30 and March 31 in each financialyear, the person collecting the tax, may (on request from such buyer), issue within onemonth from the end of such period. A consolidated certificate is required in form No 27Dfor the tax collected during the period. However, there is no requirement of furnishingsuch certificate in respect of tax collected on or after April 1, 2008.

Quarterly Statement of TCS

TCS return should be submitted quarterly (with effect from April 1, 2005) after the end of each quarter in Form No 27 EQ within 15 days from the end of each quarter or 76 daysin the case of last quarter. Quarterly TCS return cannot be submitted unless interest for late deposit of TCS is paid.

Due dates for filing of quarterly return of TCS:

Form No. Description Due Date27 EQ For the quarter ending, June 30 July, 15,27 EQ For the quarter ending, September,30 October,1527 EQ For the Quarter ending, December,31 January,1527 EQ For the quarter ending, March 31 June,15

You need to define certain setups to manage the TCS transactions in Navision 4.0.at thefollowing levels:

Creation of new account in chart of accountsNumber series setupSetup for Tax Collection at SourceSetup on Customer cardCompany Information setupGeneral ledger setupState set up

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Creation of a New Account in Chart of Accounts

You need to create balance sheet liability accounts for TCS transactions. You also needto create one account for each TCS Type under which company collects the tax.

NAVIGATION :Financial Management →General Ledger→ Chart Of Accounts

Create the necessary GL accounts for all the TCS Payables accounts. For example,TCS Payable Account -A

TCS Payable Account -BTCS Payable Account -C

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Number Series Setup

TCS certificates are reports generated in Navision and issued to Customers. You needto create separate number series for TCS Certificates. The Number Series you create

will be linked to each TCS group.

NAVIGATION :

Administration → Application Setup → General → No. Series

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Setup for Tax Collection at Source

You need to define certain setups for TCS in the Financial Management module. Thesesetups are as follows:

Accounting PeriodT.C.A.N Nos.GroupsNature of Collection

Assessee CodeSetupsPartiesConcessional CodesNOC LinesCorrection Codes

TCS Setup

A new menu is available created under – Financial Management → Setup → TaxCollected at Source, as follows:

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Accounting Period

TCS accounting period is required for generation of TCS transactions. You need tospecify TCS accounting periods while filing Form 27 EQ. TCS accounting period will bethe same as the TDS accounting period. The program will show an error if the TCSaccounting period is not defined for the transaction date.

You need to create the required accounting period to be followed for TDS and TCS. Thefinancial year to be followed as per the Income Tax Act, 1961 is April to March.

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NAVIGATION :Financial Management → Setup → Tax Collection at S ource → AccountingPeriod


Field Comments

Number Is the serial number of accounting periodand is generated automatically by theprogram.

Starting Date & Ending Date The field displays the starting and endingdates of the TCS accounting period.

Closed A checkmark in this field indicates that theTCS accounting period has been closed.

Create Year – To create a new accounting period for TCS, click the Function menu,and choose Create Year.

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Field Comments

Starting Date Define the starting date for the TCSaccounting year

Ending Date Define the ending date for the TCSaccounting year

Close Year – Click Functions Close Year, to close the accounting periods of TCS.

Once the year is closed, the „Closed field gets marked true. After the TCS accountingperiod has been closed, no TCS transaction can be done during that accounting period.

Create Quarter – Click Lines Create Quarter, to define the quarters within a specificTCS Accounting year.

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Field Comments

Quarter Define the code for the quarter (Q1, Q2,Q3, and Q4) from the dropdown list.

Starting Date Define the Starting Date of the Quarter

Ending Date Define the Ending Date of the Quarter

The program will use this setup while filing of eTCS and revised eTCS for a specificquarter.

T.C.A.N. No.

A T.C.A.N. (Tax Collection Account Number) master is available where all the T.C.A.N.numbers will be defined for different locations of a company where TCS has beencollected.

T.C.A.N number is a unique code made up of 10 alphanumeric characters.

T.C.A.N number is allotted by Income Tax Department to the collector. Collector is theperson who collects the tax from customers for selling of specified goods or providing of specified services.

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Section 203 A of Income Tax Act, 1961, says “ With effect from October 1,2004, everyperson , deducting tax or collecting tax , who has not been allotted a tax deductionaccount number or, as the case may be, a Tax Collection Account Number, shall withinone month from the end of the month in which tax was deducted or collected or January31, 2005, whichever is later, apply to the Assessing Officer in Form No. 49B for theallotment of a “Tax Deduction and Collection Account Number.”

Where a “Tax Deduction Account Number “ or “ Tax Collection Account Number“ or “Tax Deduction and Collection Account Number” has been allotted to a person, suchperson shall quote such number in all challan, certificates, returns and other documentspertaining to such transactions as may be prescribed.

The above section suggests that for all applications made after 31 st January 2005 either for “Tax Deduction Account Number” or “Tax Collection Account Number” only onenumber is allotted, that is “Tax Deduction and Collection Account Number.“ If the personis having “Tax Collection Account Number” the same should be used for TCS purposes.

NAVIGATION :Financial Management → Setup → Tax Collected at Source → TCAN Master

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Nature of Collection

Nature of Collection defines the various categories of goods on which TCS is liable to becollected.NAVIGATION :

Financial Management Setup Tax Collected at Source Nature of Collection


Field Comments

Type Define nature of collection as a code.

Description The description is defined against therespective values of TCS type.

TCS Type Select the relevant TCS Type, namely, Ato I respectively.

TCS Assessee Code

In this window, you define whether a buyer is a “company” or “others”. In TCS returncompany buyer is to be shown as „01 and other as „02 .

NAVIGATION :Financial Management Setup Tax Collected at Source Assessee Code

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Field Comments

Code Define a code for the Assessee

Description Enter the Description

Type Select Company or Others from the drop-down list

You can click TCS Setup to view the TCS details associated with the Assessee Code.Click Details to view the TDS details associated with the Assessee Code.

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TCS Setup

In TCS Setup you can define rates, threshold amounts, per contract amount, and so on,for all sub-elements of TCS applicable for different combination of the TCS type.

NAVIGATION :Financial Management Setup Tax Collected at Source Setup


Field Comments

TCS Nature of Collection Select the TCS Nature of Collection in thisfield from the lookup list as defined in theNature of collection master.

Assessee Code Select code from the Lookup list as pre-defined in the assessee code master.

Effective date Enter the effective date, from which theTCS rate would be applicable.

Concessional Code Select the values from the lookup list asdefined in Concessional Code master. Thisfield is required when the rate defined isconcessional or Zero as per the certificateissued under section 206C (9).

The values in this field arei) A, if the lower deduction is as per

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Field Comments 206C (9).ii) B, for any other reason.

The value selected here will be shown inquarterly return. On the basis of the optionvalues selected here, the values of A or B will flow in Quarterly return (27EQ).

TCS % Define the base TCS rate. It is theapplicable rate for the TCS type.

Rate can be zero.The field should be inpercentage.The field is mandatory.

Surcharge % Specify the surcharge rate, if applicable,which is computed on the TCS amount.

Rate can be zero.The field should be inpercentage.The field is mandatory

eCess % Specify the education eCess rate if applicable, which is computed on the TCSplus Surcharge amount.

Rate can be zero.The field should be inpercentage.The field is mandatory

TCS Type TCS Type will display default valuesautomatically when TCS Nature of Collection is selected.

TCS Threshold Amount Define the threshold limit, that is the

amount up to which no tax will becollected.(Presently there is no Thresholdlimit applicable in case of TCS however inview of flexibility the functionality has beenprovided)

Surcharge Threshold Amount Define the surcharge threshold limit, that

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Field Comments is, the amount up to which no surchargewill be collected.

Contract Amount Define the Per Contract Value for eachTCS Group where it is applicable. TCS willbe collected only if the total transactionexceeds the per contract value in a singletransaction of Threshold amount in afinancial year.(Presently there is no per contract value is applicable in case of TCShowever in view of flexibility thefunctionality has been provided)

TCS Account No Select the TCS Payable account from theChart of Account.

No. Series Select the number series that will be usedfor generation of certificate no s for eachTCS Group.

You need to navigate to Setup Card, to setup the above values for TCS Nature of Collection.

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You can also use the Copy functionality to create different combinations for the same

nature of collection

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Field Comments

TCS Nature of Collection Define the TCS Nature of Collection for which a new combination is to be createdin the setup.

Assessee Code Define the Assessee code

Effective Date Date from which the rates will beapplicable

TCS Concessional Code Define if any Concessional code isapplicable

Copy Define if all the fields from previous TCSNature of Collection should be copied or only a selected set of fields will be copied

You can then modify the fields according to your requirement on the setup card created.

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Party Master (Parties)

TCS parties are one time parties which are not part of regular Customer Master.

NAVIGATION :

Financial Management → Setup → Tax Collection at Source → Parties.


Field Comments

Code Define the party code.

Description Specify the Name of the party.

Address, Address 2 Specify the party s address.

State Specify the state of the party.

Postal Code Specify the relevant Postal code.

PAN No Specify the Permanent Account Number (PAN) of the party.

PAN Reference NoIf the PAN No. is not available and PAN isapplied for, then PAN Reference No. willbe filled. This PAN Reference No. will bequoted in the TCS returns filed with the taxauthority

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Concessional Code

NAVIGATION :Financial Management Setup Tax Collected at Source Concessional Code


Field Comments

Concessional Code Define various concessional codes.

Description Provide the description of the concessionalcodes.

Nature of Collection (NOC) Lines

This is the master to link the customer with different Nature of collection. One or morenature of collection can be attached to a customer.

NAVIGATION :Financial Management Setup Tax Collected at Source NOC Lines

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Field Comments

Type Choose type of party from the drop downlist, The available option are: customer,party, vendor.

No Select the number of the customer /party/vendor from the look up list.

Assessee Code Select the Assessee code for thecustomer/ party/vendor from the look uplist.

Nature of Collection Select the Nature of collection from thelookup list as defined in the TCS Nature of Collection master.

Concessional code Select the concessional code from thelookup list defined in the ConcessionalCode master.

Concessional Form Number If concessional code is applicable for

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Field Comments selected TCS type, „Concessional formNo. field will be filled with the concessionalform number of the customer/party.

Threshold Overlook Threshold limit is the maximum amountdefined in the TCS Setup master for theparticular TCS type up to which no TCSwill be collected. If you want to collect TCSeven though the threshold limit is notcrossed for the customer then you have tocheck mark threshold overlook field.

Surcharge Overlook If you want to collect surcharge eventhough the surcharge threshold limit is notcrossed for the customer then you have tocheck mark Surcharge overlook field.

Correction Type Setup

You use the Correction Type Setup window where you can define the Correction codesand their sorting order.

NAVIGATION :Financial Management Setup TCS Correction Type

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Field Comments

Code Define Code for the Correction type

Correction Type Select Corrections Type (C1, C2, C3, C5,and C9) from the dropdown list provided,that can be done at the time of revisedreturns.

Description Specify the details of correction codes.

Sorting Order Define the sorting order of the correctiontype.

The program will use the sorting order for corrections defined in the setup to file therevised eTCS returns. Correction statements (batches) in a multiple batch correctionstatement have to necessarily be in the following sequence:

C1, C5, C2, C3, C9, Y

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Customer Master


Field Comments

P.A.N. No Define the PAN No (Permanent Accountnumber) of the customer. PAN No should

be 10 alphanumeric characters.

PAN Status Select the status of the PAN from the drop-down list where PAN No is not available, or PAN No is available with invalid No. Theavailable options are PANAPPLIED /PANINVALID / PANNOTAVBL

PAN Reference No Define the PAN Reference no. PANreference No is available with customer

where PAN is applied to the Income tax Authority.

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Company Information Setup

A person selling any goods specified in the Section 206C of the Income Tax Act isrequired to apply and obtain a new number called T.C.A.N. under Section 206CA.


Field Comments

T.C.A.N No Select the T.C.A.N. No. from the look uplist. It is mandatory to enter the T.C.A.N.Number because all TCS entries aregenerated based on this number.

Assessing Officer Specify the Assessing officer . This field willaccept alphanumeric characters.

Circle Number Specify the circle number of the IncomeTax Department to which the Assesseebelongs .This field will acceptalphanumeric characters.

Ward Number Specify the Ward number of the IncomeTax department to which the Assesseebelongs .This field will acceptalphanumeric characters.

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General Ledger Setup

TCS rounding precision will be defined in the General ledger setup.

. Fill in the fields according to these guidelines:

Field Comments

TCS Rounding Type Define whether TCS amount will berounded up or down or nearest. Theprogram uses this information to round theTCS amount to the whole number.

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State

NAVIGATION :Financial Management Setup Sales Tax States


Field Comments

Code Define the Code for each state.

Description Define the description for each state code.

State Code for eTDS/eTCS Define the state code for eTDS / eTCS thatis to be used for eTCS filing with the tax.

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Customer Transactions

TCS functionality is available in the following windows:

General JournalSales JournalSales Order Sales InvoiceCash Receipt JournalCredit MemoReturn Order

In Sales Order, Sales Invoice, General Journal, Cash Receipt Journal, Sales Journal,Credit Memo and Return Order for TCS calculations, the following fields are mandatory:


Field Comments

TDS/TCS Party Type Select the party type from the drop downlist.

TDS/TCS Party Select the Customer / Party Number fromthe list.

TDS/TCS Assessee Code The assessee code is set to a defaultvalue automatically from the NOC Partymaster.

TCS Nature of Collection Select the Nature of collection from thelook up list on which TCS is to becomputed. After selecting the above field,the program automatically picks up thefollowing fields value from the respectivetable.

TDS/TCS% The TCS rate is set to default automaticallyfrom TCS Setup Master based on thecombination of Nature of Collection and

Assessee Code.

TDS/TCS Amount : The TCS Amount is computed

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Field Comments automatically by the program.

Surcharge % The Surcharge rate is set to defaultautomatically from TCS Details Master,based on the combination of nature of collection and assessee code.

Surcharge Amount The Surcharge Amount is computedautomatically by the program.

TDS/TCS Amount includingSurcharge

This field displays the total of TCS andSurcharge.

eCess % The eCess rate is set to defaultautomatically from TCS Setup Master based on the combination of nature of collection and assessee code.

eCess on TDS/TCS Amount : The eCess Amount is computedautomatically by the program.

Total TDS/TCS Including eCess This field displays the total amount of TCSto be deducted for the transaction.

When you select the TCS Nature of Collection from the lookup button, the TCS rate isset to a default value automatically from TCS Setup Master, based on the combination of nature of collection and Assessee Code. Other automated fields of a transaction, are asfollows:

TDS/TCS AmountSurcharge %Surcharge Amount:TDS/TCS Amount including Surcharge

Education CesseCess %eCess on TDS/TCS AmountTotal TDS/TCS Including eCess

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Direct Invoices using General Journal Tax is collected on Customer Invoices against which no advance payment has beenreceived. When you make invoice transactions program will make a few additionalentries, apart from the regular entries.

NAVIGATION :Financial Management →General Ledger → General Journals

Following are the steps for creation of an invoice through general journal

Enter the Posting DateSelect Document Type as Invoice Select TDS/TCS Party Type as Customer Select the TDS/TCS Party from the look up listDo not Select Account Type and Account No as these are automaticallypopulatedSelect TCS Nature of Collection from the look up list For example - A Select the T.C.A.N NoEnter AmountEnter Balancing Account

The following fields are automated from the predefined setups:

TDS/TCS Assessee Code TDS/TCS %TDS/TCS Amount:Surcharge %Surcharge Amount:TDS/TCS Amount including Surcharge

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eCess %eCess on TDS/TCS Amount : Total TDS/TCS Including eCessPost the Journal

When making Invoices using General Journal / Sales Journal, make sure that theDocument Type is selected as „Invoice and the Invoice Amount is denoted with apositive (+) sign, as the customer has to be debited with the amount.

Direct Invoices using Invoices Tax is collected on Customer Invoices against which no advance payment has beenreceived. While making invoice transactions program will make a few additional entriesapart from the regular entries.

NAVIGATION :Financial Management→ Receivables → Invoices

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Following are the steps for creation of an invoice through Sales Invoice window

Select Sell to Customer NoEnter Posting DateEnter the External Document No On the shipping tab select Location Code On the Lines Select account Type item . Select No .Enter Quantity Select TCS Nature of CollectionEnter Unit Price Excl. VATTo compute the TCS value, on Functions menu button, click Calculate TCS.


TDS/TCS Assessee Code TDS/TCS %

TDS/TCS AmountSurcharge %Surcharge Amount:TDS/TCS Amount including SurchargeeCess % on TDS/TCSeCess on TDS/TCS AmountTotal TDS/TCS Including eCessPost the Invoice

Sales Order based Invoices using Orders

Tax is collected on Customer Sales Orders against which, no advance payment hasbeen received. When you make a Sales order, program will make a few additionalentries apart from the regular entries.

NAVIGATION :Sales & Marketing → Order Processing →Orders

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Following are the steps for creation of an invoice through Sales Order window

Select Sell-to Customer No.Enter Posting DateEnter the External Document No

On the Shipping tab select Location Code On the Lines Select account Type Item . Select Item No . Enter Quantity Select TCS Nature of Collection.Enter Unit Price Excl. VATTo compute the TCS value, on Functions menu button, click Calculate TCS.


TDS/TCS Assessee Code:TDS/TCS %:TDS/TCS Amount:Surcharge %:Surcharge Amount:TDS/TCS Amount including Surcharge.eCess % on TDS/TCS Amount:eCess on TDS/TCS Amount : Total TDS/TCS Including eCess:Release and Post the SO.

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Advance Payment using Cash Receipt Journal TCS is collected when payment is received or debited to the customer which ever isearlier. At the time of receiving the advance, seller has to collect the TCS and this TCS

will be calculated using the grossing up approach.

Examples are shown in the Appendix.NAVIGATION :Financial Management→ Receivables →Cash Receipt Journal

Following are the steps for receiving the payment through Cash receipt journal:

Select Document Type as Payment Enter Document no Select TDS/TCS Party Type as Customer/Party Select the TDS/TCS PartyDo not Select Account Type and Account No as these are automaticallypopulated.Enter the External Document NoSelect TCS Nature of collection.Select the T.C.A.N No from the look up buttonEnter Amount


TDS/TCS Assessee CodeTDS/TCS %TDS/TCS Amount:Surcharge %

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Surcharge AmountTDS/TCS Amount including SurchargeeCess %eCess on TDS/TCS AmountTotal TDS/TCS Including eCessNow Post the Journal

Adjustment of Advance Payment against Invoice / Order

Adjustment of advance can be made through the following windows where the TCS hasalready been collected in advance:

Sales JournalSales Invoice

Sales Order General Journal

TCS is not collected on Customer Invoices against which advance payment has beenreceived and TCS collected at the time of receipt of advance payment.

NAVIGATION :Financial Management →Receivables → Sales Journals

Following are the steps for adjusting advance against an invoice:

Enter the Posting DateSelect Document Type as Invoice Enter the External Document No, for example- Cust

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Select TDS/TCS Party Type as Customer Select the TDS/TCS PartyDo not Select Account Type and Account No as these are automaticallypopulatedSelect TCS Nature of CollectionSelect the T.C.A.N NoEnter AmountEnter Balancing Account Select Applies to Doc. Type and Applies to Document No. for the payment thathas been received against this invoice


TDS/TCS Assessee Code TDS/TCS %TDS/TCS AmountSurcharge %

Surcharge Amount:TDS/TCS Amount including SurchargeeCess %eCess on TDS/TCS Amount : Total TDS/TCS Including eCessPost the Journal

The program will not calculate TCS at the time of invoicing since the TCS has alreadybeen collected at the time of receipt of advance payment against the invoice.

Credit Memo through Return Order

NAVIGATION :Sales & Market ing→ Order Processing → Return Orders

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Following are the steps for creating credit memo through return order:

Select Sell-to Customer No.Enter Posting DateEnter the External Document NoOn the Shipping tab -select Location Code Select Applies to Doc. Type and Applies to Doc No, if applicableOn the Lines -Select account Type Item . Select Item No .

Enter Quantity Select TCS Nature of Collection.Enter Unit Price Excl. VATTo compute the TCS value, on Functions menu button, click Calculate TCS.


TDS/TCS Assessee Code:TDS/TCS %:TDS/TCS Amount:Surcharge %:Surcharge Amount:TDS/TCS Amount including Surcharge.eCess % on TDS/TCS Amount:eCess on TDS/TCS Amount : Total TDS/TCS Including eCess:Release and Post the Sales Return Order.

If Credit Memo is created before remittance of Tax to government, the TCS entries willget reversed proportionately, on the basis of the quantity returned.

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In case TCS amount has been remitted to Income Tax department, TCS Payableaccount will not be reversed, incase Applies to document type and Applies to documentNo has been selected.

Payment of TCS amount to government The TCS that you have collected on various transactions described above has to befinally deposited with the government. Payment of TCS collected can be done throughGeneral Journal in General Ledger Module

Navigation: Financial Management→ General Ledger → General Journal →Functions →Pay TCS

On Functions menu button, click Payment and then select TCS.

A form opens that will show all the TCS entries.

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Select the field or fields on which the filters need to be put.The form will show the TCS entries for the selected filters onlySelect the entries for which TCS amount needs to be paid.Click Pay button of the screen, so that the total of the selected entries istransferred to the General Journal.Post the journal .

P ERIODIC ACTIVITIES (TCS)NAVIGATION :Financial Management → Periodic Activities → Tax Collection at Source

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TCS Adjustment Journal

Adjustment Journals are to be used for correction of the TCS amount already collectedbut which are yet to be paid to the Income Tax Authority.

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Select the Transaction number from the look up list and change the details to correct thetransaction. You can increase or decrease the TCS rate, Surcharge rate, eCESS rateand the adjustments would be made accordingly.

NAVIGATION :

General Ledger Periodic Activities Tax Collected at Source TCS AdjustmentJournal

1 Filter the entries for which you want to make the adjustments.2 The selected entry shows the TCS%, eCess %, surcharge % that was

applied to it at the time of posting.3 Now fill in the new TCS%, surcharge % and eCESS % for this entry. Post the

journal.4 The revised TCS Amount has now updated in the relevant GL accounts for

TCS payable and Customer account.

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Update TCS Register

In update TCS register window you can update the challan details against theamount deposited in the bank.

NAVIGATION :General Ledger → Periodic Activities → TCS → Update TCS Register

TCS register is maintained to keep track of all the TCS payments made to thegovernment with relevant challan details. The challan number, challan date and bankname is updated using this functionality which has to be updated for each transaction tobe printed on TCS certificate.

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Field Comments

Pay TCS Document No This field specifies the Pay TCS DocumentNo. of the line selected from the updateTCS register .

Challan NoThis field specifies the Challan No. Challanis a mode of payment of tax to thegovernment account. A bank gives theChallan No. by stamping on the challan,through which TCS amount has beendeposited.

Challan Date This field specifies the date of the challan .

Bank NameThis field specifies the name of the bankbranch where you deposited the TCSamount .

BSR CodeThis field specifies the BSR Code. BSRcode is the identification code of the bankbranch, where TCS amount is deposited.BSR code is applicable to bothGovernment and Non governmentorganizations. This code must have seven

characters.

Cheque No This field specifies the Cheque / DDnumber through which challan is paid. Thevalue of this field must be zero if tax isdeposited in cash. No value will beprovided if tax is deposited by book entry.This field can contain 10 integers.

Cheque Date This field specifies the issue date of Cheque / DD through which challan ispaid.

These details get updated on individual TCS entries. Challan details can be changedbefore filing of eTCS returns. Once the return is filed, any changes in the challan detailscan be done only through C2/C3 correction.

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TCS Challan Register

NAVIGATION :General Ledger → Periodic Activities → TCS → TCS Challan Register

This window will show Challan wise TCS details. In this window, you will update thechallan information with the following details:

1 Interest Amount2 Others3 TCS deposited by Book-entry (Boolean, with default value No)

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Field Comments

Interest Amount TCS interest amount is paid to thegovernment, when TCS has not been paidor collected on or before the due date.

After entering the interest amount inUpdate Challan Register, it will besimultaneously updated in ChallanRegister and Quarterly Return 27EQ .

Others TCS Others is paid to the government,when the user deposits the TCS amount,but does not debit to any customer accountor other cases. The amount, entered in thisfield can be updated from Update ChallanRegister and it would simultaneously beupdated in Challan Register and QuarterlyReturn 27EQ.

Paid by Book entry This field is relevant, when the collection of TCS is made by the government or, by anyperson on behalf of the government, fromthe customer. A check mark in this fieldshows the TCS has been paid throughbook entry and simultaneously TCSamount and challan details will be updatedin challan registers and Quarterly return27EQ.

Generation of TCS Certificate

TCS certificates need to be issued to the buyers from whom TCS has been collected.These are generated with a unique serial number.

NAVIGATION :

General Ledger → Periodic Activities → TCS → Generate TCS Certificates

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Click Functions → Generate Certificate Nos.


Field Comments

Party type Specify whether party type is either Customer or Party.

Party Select the Customer No. /Party from theavailable list based on the Party type f illedabove.

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Field Comments

TCS Type Select the TCS Type applicable.

Monthly Certificate Checkmark if generating a monthlycertificate for the customer/party.

Starting Date, Ending Date Specify the date range for the generationof certificate.

The Certificate Nos. would be generated for TCS entries from the No. series defined inthe TCS Group setup.

To generate report 27D, click Functions 27D

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TCS 27D


Field Comments

Duplicate A checkmark means that the certificate canbe used as a Duplicate copy. The word

“DUPLICATE” will also appear on the TCScertificate, that is, Form 27D.

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Form 27EQ

NAVIGATION :General Ledger →Periodic Activities →TCS →Form 27EQ


Field Comments

TCAN Location Select the T.C.A.N. No from the look up listfor which TCS to be generated.

Report Frequency Select the Quarters from the drop downlist for which 27EQ is to be generated .Theavailable options of quarters are (Quarter 1, Quarter 2, Quarter 3, and Quarter 4)

TCS Accounting Period Select the Financial Year from the lookuplist for which TCS is to be generated.

Full Name Specify the name of the person whosename will be printed on the Report 27EQ.

Designation Specify the designation of the personwhose name will be printed on the Report27EQ.

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Field Comments

Printing date Specify the date on which the Report27EQ will be printed.

Generate eTCS

For generating the eTCS in text format as required by the Income Tax Department,place a checkmark in 27EQ. eTCS return is furnished in a CD / floppy duly filled withIncome Tax Department and signed Form 27 B in physical form.

NAVIGATION :General Ledger → Periodic Activities → TCS → Generate eTCS

After you click Generate eTCS, a new window opens where you need to define certaininformation for which eTCS is to be generated.

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Field Comments

File Name In this field, you specify the path where theeTCS in text format is saved. For example, Desktop, My Documents, C:\, or D:\.Input filename should not be more than 12characters (including the .txt extension)and should not contain any specialcharacters. For example, a colon or aslash, otherwise at the time of passing textfile through FVU it will show an error: „Filename is too long . An example of a validfilename is FORM27EQ.txt.

TCAN Location Select the T.C.A.N. No from the look up listfor which the 27EQ in text format will begenerated.

Report Frequency Select the quarter from the drop down list.

Financial Year Choose Financial Year from the look uplist.

Full Name Specify the name of the person whosename will be printed on the Report 27EQ.

Designation Specify the designation of the personwhose name will be printed on the Report27EQ.

Printing date Specify the date on which the Report27EQ is printed.

This process will create eTCS return in text format for a period and also generate 27Breport as per the specified format. This process cannot be run if the generation for 27EQreport has not been run for at least once.

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You have the option to run only the 27EQ report without generation of eTCS. After filingwith the government, you need to click „File eTCS to update the file status to mark theentries as filed.

The following information will be entered for updating the status of the return 27EQ:

Quarter Financial year Filing DateProvisional Receipt No.

„eTCS filed will run only under the following conditions:

The Report selected is Report 27EQ

The quarter selected in the field „Period is in open status that is, the „eTCS Filedfor the Report selected for the relevant period is not marked.TCS report has been run once.

The program will capture the following information:

1 eTCS Filed ( Yes or No)2 Date of filing

Return Status displays information about eTCS returns and revised returns that havebeen filed. The information will be displayed financial year and Quarter wise.

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You can view all the Previous RRR Nos. defined for the quarter through the lookup.

Correct 27EQ EntriesThere are six different types of Correction Statements that can be furnished by thedeductor for various correction types. These are as follows.

C1: Correction in Deductor / Collector Details (excluding TAN)C2: Correction in Deductor/Collector (excluding TAN) and / or Challan DetailsC3: Correction in Deductor/Collector (excluding TAN) and / or Challan Detailsand / or Deductee DetailsC5: Correction of PAN of Deductee.C9: Addition of Challan(s)Y: Cancellation of statement to be made for rectification of Deductor/Collector TAN

In a C1 correction statement a deductor can update its PAN, name, demographic details,re sponsible person s details, and type of deductor. Details mentioned in the regular statement or last correction statement furnished will be updated with the details providedin the current correction statement. Hence fields where no corrections are requiredshould contain values as mentioned in the regular or last correction statement.

A C2 correction statement can be furnished when:

There are corrections only in challan detail (CD) records ORThere are corrections in challan detail (CD) records and in deductor details(except TAN) (BH), like PAN, name, demographic details, responsible person sdetails, type of deductor, etc.


There are corrections only in deductee detail (DD) records or,There are corrections in deductee detail (DD) records and challan detail (CD)records and/or deductor details (except TAN) like PAN, name, demographic

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details, responsible person s details, type of deductor, and so on. Detailsmentioned in the regular or last correction statement furnished will be updatedwith the details provided in the current correction statement.


There are updation in deductee PAN, that is, a valid 10-digit PAN to be replacedin place of PANINVALID, PANNOTAVBL and PANAPPLIED or

A valid 10-digit deductee PAN stated in the regular or last correspondingstatement to be replaced with another valid 10-digit PAN. Details mentioned inthe regular or last correction statement furnished will be updated with the detailsprovided in the current correction statement.

A C9 Correction Statement can be furnished when:

A new challan along with underlying deductee records (if any) is to be added tothe regular statement.

A Y Correction Statement can be furnished when:

There is a change in the TAN number of the deductor / collector.

The corrections statements can be furnished as a single statement. Statements withmultiple corrections are called Multiple Batch-Correction Statement. Each type of correction in a Multiple Batch-Correction Statement is termed a Batch.

Multiple Batch Correction Statement can contain various corrections pertaining tocorrections in the regular statement furnished (same TAN, Form no., Period, F.Y., A.Y.)only. For example, if there are different types of corrections in different forms (Form 24Q/ 26Q / 27EQ) for the same TAN and Periodicity, separate files with respective batchesneed to be furnished for each kind of form.

A Multiple Batch Correction Statement contains a File Header (FH) record. There will bemultiple Batch Header (BH) records depending on the number of batches (C1, C2, C3,C5, C9). There are various combinations in which a Multiple Batch Correction Statementcan be prepared and furnished.

A Multiple Batch Correction Statement can be furnished only for C1, C2, C3, C5 and C9type of Correction Statements. „Y type of Correction Statement should be furnishedseparately. It cannot be part of Multiple Batch Correction Statement.

In case of a Multiple Batch Correction Statement, separate provisional receipts will begenerated for each batch within the statement. For example, if there are three batcheslike C5, C3, and C9 then, three separate provisional receipts would be generated.

A new form is available for corrections in the Quarterly Statement. You need to enter thefinancial year and the quarter for which you want to post the corrections. The form willdisplay the entries from 27EQ table for particular quarter with all the details includingchallan and invoice details. The corrections in a return will be allowed only when theoriginal return has been filed.

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If Correction is to be made on Challan Record, the following Form will open.

If Correction is to be made on Party Record, the following Form will open.

If Correction is to be made on Collector s T.C.A.N., the following form will open:

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Revised Form 27EQ

Once the corrections are done, a form is provided for the generation of revised 27EQ.

NAVIGATION :Financial Management General Ledger → Periodic Activities →Tax Collectedat Source → Revised Form 27EQ

.


Field Comments

TCAN Location Select the T.C.A.N. No from the look up listfor which the Revised 27EQ return will begenerated.

Report Frequency Choose Quarter from the drop down list for which revised 27EQ will be generated.

Financial Year Select the financial year from the look uplist for which 27 EQ return to be generated.

Full Name Specify the name of the person, whosename will be printed on the Revised 27EQreturn.

Designation Specify the designation of the person,whose name will be printed on theRevised 27EQ return

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Field Comments

Printing date Specify the date on which the Revised27EQ return will be printed.

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Generate Revised eTCS

After doing specific corrections, you can generate eTCS through “Generate RevisedeTCS” for 27EQ.

NAVIGATION :Financial Management General Ledger → Periodic Activities →Tax Collectedat Source → Generate Revise d eTCS

A form will be opened where you need to define various filter conditions for thegeneration of revised 27EQ.

A Multiple Batch Correction Statement can be furnished only for C1, C2, C3, C5 and C9type of Correction Statements. „Y type of correction statement should be furnished

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separately. It cannot be part of Multiple Batch Correction Statement. Hence for acorrection entry involving C1, C2, C3, C5, C9 and Y type of corrections, three differenteTCS files need to be created.

1. eTCS for C1, C2, C3, C5 or C9 corrections2. eTCS for Y type corrections3. eTCS for regular Y

Revised 27B will be generated with the generation of Revised eTCS

After preparation of the Correction Statement the same is to be validated through theFile Validation Utility (FVU). The procedure for validation is the same as that for regular statements. Thereafter, furnish the validated correction statement with a TIN-FC or directly through the NSDL web-site (www.tin-nsdl.com).

The Revised eTCS can be filed for a specific quarter.

This option requires following information to be entered:

Quarter Financial year Date of filingProvisional Receipt No.

In case of a Multiple Batch Correction Statement separate provisional receipts will begenerated for each batch within the statement. For example, if there are three batches

like C5, C3, and C9, three separate provisional receipts will be generated. You can enter multiple provisional receipt nos. in the field. The last Provisional Receipt No. will be usedfor generation of Batch Header.

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The program will maintain the full revision history of the following

1 Records modified2 Number of times modified3 Dates of filing of revised returns4 Receipt No. of Previous Return.

Return Status will display Revised Returns that have been filed. The data will bedisplayed according to Financial Year and Quarters.

You can view all the Previous RRR No. s defined for the quarter through the lookup.

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Reports

NAVIGATION :TCS Reporting: Financial Management Reports TCS Reporting

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Issued TCS Certificates

This report shows all the TCS certificates generated for the TCS Party based on thefilters defined above.

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TCS Challan Register

This report shows the TCS Challan Register details based on the filters defined above.

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TCS Entries

This report shows the invoice wise details for Excise amount, Sales Tax Amount, andTCS amount.

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Appendix

Example 1:

M/S ABC has sold the Scrap to M/S XYZ for Rs. 10,000/-(1% as TCS rate, 10% Surcharge rate, 2% eCess rate)

Following entry will be posted in the program.

M/S XYZ A/c Dr. Rs. 10112To TCS Payable A/c Cr. Rs. 112To Sales A/c Cr. Rs. 10000

Customer (M/S XYZ) Account will be debited by Rs. 10112/-

ABC will deposit TCS to the government authority by passing the following entry.

TCS Payable- A/C Dr. Rs.112To Cash / Bank A/C Cr. Rs112

Now M/S ABC will receive the payment from M/S XYZ.

Bank A/c Dr. Rs.10112To M/S XYZ A/c Cr. Rs.10112

ABC will issue a TCS certificate (form 27D) for Rs. 112 to XYZ.

Example 2:

M/S ABC has sold the Scrap to M/S XYZ for Rs. 10,000/- and received the advancepayment from M/S XYZ.(1% as TCS rate, 10% Surcharge rate, 2% eCess rate)

Following entry will be posted in the program.

Bank A/c Dr. Rs.10000To TCS Payable A/c Cr. Rs. 111To M/S XYZ A/c Cr. Rs. 9889

In this case, a grossing up method will be used for calculation of TCS amount onRs.10000.

At the time of raising Invoice to the customer the following entry will be posted.

M/S XYZ A/c Dr. Rs.9889

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To Sales A/c Cr. Rs.9889




Example 3:

Raising Invoice to M/S XYZ against partial Advance received from the customer (withreference to Example 2)

In this case, if the invoice has to be made for Rs.20000 for M/S XYZ and already apayment of Rs.10000 received against the invoice. The program will calculate TCS onthe remaining amount.

Rs.20000-Rs.9889 = Rs.10111.

Entry will be.

M/S XYZ A/c Dr. Rs.10224To TCS Payable A/c Cr. Rs.113To Sales A/c Cr. Rs.10111




Example 4:

Correction in TCS:

A regular statement containing four challans / transfer voucher details where:

Challan 1 has 10 Party recordsChallan 2 has 5 Party recordsChallan 3 has 15 Party recordsChallan 4 has 20 Party records

Subsequently, there are corrections in the following records in the regular statement;

Corrections in Collector DetailsIn challan 1, update CIN Details

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In challan 3, CIN Details to be rectified and for underlying party 4 incorporate 10-digit PAN instead of “PANINVALID” in the Party PAN field, for party 10 replacevalid PAN with another valid PANIn Challan 4, add a party record.

An additional challan with two underlying parties needs to be added. There are nochanges in challan 2 or its underlying party records.

The sequence of these batches (correction statements in a file) will be as follows:

File header record (FH)Batch Header record 1 (BH) – C5 (updation of party PAN)Challan detail record 3 (CD)Party detail record 10 (DD) – update valid to valid PANBatch Header record 2 (BH) – C2 (updation of Challan) with batch updationindicator 1 for corrections in Collector Details.Challan / Transfer Voucher Detail record 1 (CD) – updation of CIN

Batch Header record 3 (BH) – C3Challan / Transfer Voucher Detail record 3 (CD)Party Detail record 4 (DD) – update PANINVALID with valid PANChallan / Transfer Voucher Detail record 4 (CD)Party Detail record 21 (DD) – addition of a PartyBatch Header record 4 (BH) – C9 – addition of a ChallanChallan / Transfer Voucher Detail record 5 (CD)Party Detail record 1 (DD)Party Detail record 2 (DD)

If there are no corrections in Challan or Party Details except for updation of party PANand corrections in Collector Details along with addition of Challan, the sequence will be:

C1, C5, and C9

A Multiple Batch Correction Statement can be furnished only for C1, C2, C3, C5 and C9type of Correction Statements. „Y type of Correction Statement should be furnishedseparately. It cannot be part of Multiple Batch Correction Statement.

In case of a Multiple Batch Correction Statement separate provisional receipts will begenerated for each batch within the statement. For example, if there are three batcheslike C5, C3, and C9 three separate provisional receipts will be generated.

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Microsoft ® Business Solutions–Navision ® 4.0- VAT Opening

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Table of ContentsOverview of Functionality......................................................................................3

Detailed Setup...................................................................................................3 Comprehensive Functionality ............................................................................3 Reports..............................................................................................................3

Value Added Tax Opening....................................................................................3 Setup for VAT Opening .........................................................................................4

Source Code Setup...........................................................................................4 VAT Batches .....................................................................................................4

VAT Opening Journal............................................................................................5 Input VAT Opening (Normal Item) .....................................................................8

Viewing the Posted Transaction ....................................................................9 Input VAT Opening (Capital Goods) - VAT Deferment with Settled Period. ....12

Viewing the Posted Transaction ..................................................................13 Input VAT Opening (Fixed Asset) - VAT Deferment without Settled Period ....15

Viewing the Posted Transaction ..................................................................16

Output VAT Opening (sale) .............................................................................18 Viewing the Posted Transaction ..................................................................18

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VAT Opening functionality facilitate the entry of opening balances in the statuary recordswhich helps in maintaining and generating appropriate & accurate statutory records andreports using the existing Navision Localization feature.

Detailed Setup

Detailed setup of Sales Tax is required for entering opening balances of VAT in thestatutory records.


Following are the comprehensive functionalities covered under VAT Opening.

• Opening Balances of Input VAT.• Opening Balances of VAT Deferment.• Opening Balances of Output VAT.

Reports

The existing reports of VAT for examples: Intrastate Purchase/Sales, Purchase Book,Sales Book, and VAT Deferment will get updated with opening transaction.

Value Added Tax Opening

To update the opening balances of VAT, the user has to create the Sales Tax Setup inthe following ways:

• Create State Code with Tax Account (Sales), Tax Account (Purchase), and VATDeferred Account No. in the States setup.

• Mention the deferments period in the Sates setup.

• Create tax group code in the Tax Groups setup.

• Create tax jurisdiction with tax type “VAT” and map it with state code in the TaxJurisdiction setup.

• Make the combination of tax jurisdiction with tax group code in the Tax Detailssetup and define the VAT % in the Tax below Maximum field with some effective

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date. Place a check mark in the Capital Goods field and in the Creditable Goodsfield.

• Create the Tax Area Code and select it in the Tax Area Location setup.

• Mention the same state code in Vendor/Customer and Location card.

Setup for VAT Opening

Source Code Setup

Navigation:Financial Management → General Ledger → Setup → Trial Codes → Source CodeSetup

Choose the source code from the lookup list in the VAT Opening field.

VAT Batches

NAVIGATION:Financial Management → Setup → Sales Tax → VAT Batches

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You must create batch in the VAT Batches form before entering the opening balances of VAT.

Create the VAT batches by entering the following fields :

Fields Description

Batch Name Define the code of the batch, you want tocreate (For example: Opening).

Description Define the description of the code, youhave entered.

No. Series Choose the number series from the lookuplist. VAT opening journal will be postedwith this number series.

Source code Choose the source code from the lookuplist.

VAT Opening Journal

Navigation:Financial Management → General Ledger → Periodic Activity → Value Added Tax → VAT Opening Journal

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A new Interface has been provided to enter the opening balances of VAT.


Fields Description

Transaction Type Choose the transaction type from the dropdown button. The available options are:

Purchase and Sale.

Document No. This field shows the document number of the selected transaction. This field iseditable.

Posting date This field shows the posting date of theselected transaction. This field is editable.

Type Choose the type from the drop downbutton. The available options are: G/L

Account, Item and Fixed Asset.

If you are selecting item for purchasetransaction then you have to select theitem ledger entry for which you areentering the opening balances.

Item Ledger Entry No. Choose the item ledger entry from thelookup list for type “Item”.

No. Choose the number for selected type (ItemNo., G/L Account No. and Fixed AssetNo.).

Date of Purchase (Capital Goods) Enter the date of purchase of capital goodsin case entering the opening balances of input VAT for the purchase capital item.

Source type Source type will automatically display whileselecting the transaction type. If transaction type is Purchase then sourcetype will be Vendor and if transaction type

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Fields Descriptionis Sale then source type will be Customer.

Source no. Choose the vendor/customer number fromthe lookup list.

Location Code Choose the location code from the lookuplist.

Note: Location state code andvendor/customer state code should besame for entering VAT opening. If statecode is blank then company state codeshould match with vendor/customer statecode.

Quantity Value in the Quantity field will betransferred after selecting item ledger entrynumber in case of type “item”.

This field is editable.

Unit Price Enter the unit price of the Item, G/L Account, and Fixed Asset.

Amount The system calculates amount bymultiplying quantity with unit price.

Tax % This field shows the tax percentage thathas been defined in the setup

Input Credit/Output Tax AmountThis field shows input credit/output taxamount of the transaction.

Non ITC Claimable Usage % Enter the Non ITC Claimable Usage % if applicable. This is applicable in purchasetransactions.

Amount Loaded on Item This field shows the amount that has beenloaded on Item.

No. of Deferment Settled This field shows the number of defermentsettled if the purchase transaction hasdeferments and some deferments havealready been settled.

G/L Account No. By default the system will show the Tax Account (Purchase), Tax Account (Sales)and VAT Deferred Account number in thisfield.

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Fields Description

Bal. G/L Account No. By default the system will show the Tax Account (Purchase), Tax Account (Sales)and VAT Deferred Account in this field.

Note: You can also post the transactions with dimensions available on the Line menubutton in the form.

Input VAT Opening (Normal Item)

There should be item ledger entry for the item in case entering the opening balance of input VAT for normal item.

Enter the following Information in the VAT Opening Journal.

Transaction Type: Purchase Document No.: OP000127 Posting Date: 19/03/07 Type: Item Item ledger Entry No.: 1475 (Selected from item ledger entries) No.: 1000 Description: Bicycle.Source Type: Vendor Source No.: 10000 Location Code: Blue Quantity: 10 Unit Price: 1000 Amount: 10000 Tax %: 10 Input Credit/Output Tax Amt.: 1000 (10% of 10000) G/L Account No.: 5912 (Tax Account (Purchase)) G/L Account No.: 5912 (Tax Account (Purchase))

Post the VAT Opening Journal.

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Viewing the Posted Transaction

Navigation:Financial Management → General Ledger → History → Navigate

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G/L Entry

The program creates the following G/L entry:

Particulars Type Amount(Rs)Sales Tax Account (Purchase) DR 1000Sales Tax Account (Purchase) CR 1000

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Detailed Tax Entry

The system will create detailed tax entry with Input credit/output tax amount and withother details. Further this transaction will be available in VAT settlement form for doingVAT settlement.

Note 1: User can also use the Type as “G/L Account” to enter the opening of Input VAT.

Note 2: In case of purchase of item for Export or Deemed Export place a check mark inthe Location card in Export or deemed export filed and enter the opening balances. The

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system will create the detailed tax entry with Export or Deemed export filed “true” andalso show the amount of ITC “Input VAT Credit (Exports Sales)” in VAT Settlement form.

Note 3: If user wants to enter the balances of Input VAT for items then first he/she hasto enter/create Item Ledger entry. If user wants to enter the balances of Input VATconsolidated then he/she can use G/L Account for that, in this case no need to createitem ledger entry.

Input VAT Opening (Capital Goods) - VAT Deferment with Settled Period.

In case of entering the opening balance of input VAT for capital goods there should beitem ledger entry for that item.

In the states setup 12 deferments periods has been defined.


Transaction Type: Purchase Document No.: OP000130 Posting Date: 19/03/07 Type: Item Item ledger Entry No.: 1476 (Selected from item ledger entries) No.: 80206 (FA is true in Item card) Description: Webcam Date of Purchase (capital Goods): 01/03/06 Source Type: Vendor Source No.: 10000 Location Code: Blue Quantity: 10 Unit Price: 50000 Amount: 500000 Tax %: 10 Input Credit/Output Tax Amt.: 50000 (10% of 500000)No. of Deferments settled: 12 (from 01/03/06 to 28/02/07 deferments has been

settled) G/L Account No.: 5913 (VAT Deferred A/C) G/L Account No.: 5913 (VAT Deferred A/C)

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G/L Entry


Particulars Type Amount(Rs)VAT Deferred A/C DR 50000VAT Deferred A/C CR 50000

Detailed Tax Entries

The system will create 13 detailed tax entries from number 0 to 12. For first 12 entries

the Settlement field will be marked “True” (from no. 0 to 11).

The last entry will be available for VAT settlement .

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Input VAT Opening (Fixed Asset) - VAT Deferment without Settled Period

Case: Entering the opening balance of input VAT for fixed asset.

In the States setup, 12 deferments periods have been defined.


Transaction Type: Purchase Document No.: OP000131 Posting Date: 19/03/07 Type: Fixed Asset Item ledger Entry No.: Blank No.: FA000050 Description: Conveyor Belt Date of Purchase (capital Goods): 01/03/07 Source Type: Vendor Source No.: 10000 Location Code: Blue Quantity: 1Unit Price: 50000 Amount: 50000 Tax %: 10 Input Credit/Output Tax Amt.: 5000 (10% of 50000)No. of Deferments settled: 0 G/L Account No.: 5913 (VAT Deferred A/C) G/L Account No.: 5913 (VAT Deferred A/C)


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Navigation:

Financial Management→

General Ledger →

History→

Navigate

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G/L Entry


Particulars Type Amount(Rs)VAT Deferred A/C DR 5000VAT Deferred A/C CR 5000

Detailed Tax Entries

The system will create 13 detailed tax entries from number 0 to 12. And distribute the tax

amount as Input Credit/Output Tax amount in 13 installments. These transactions will beavailable for VAT settlement accordingly.

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Output VAT Opening (sale)

In case of entering opening balance of Output VAT


Transaction Type: Sale Document No.: OP000132 Posting Date: 19/03/07 Type: Item Item ledger Entry No.: Blank No.: 1000 Description: Bicycle Source Type: Customer Source No.: 10000 Location Code: Blue Quantity: 10 Unit Price: 4000 Amount: 40000 Tax %: 10 Input Credit/Output Tax Amt.: 4000 (10% of 40000)G/L Account No.: 5911 (Sales Tax Account (Sale)) G/L Account No.: 5911 (Sales Tax Account (Sale))




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G/L Entry

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Particulars Type Amount(Rs)Sales Tax Account (Sale) DR 4000Sales Tax Account (Sale) CR 4000

Detailed Tax Entry

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The system will create detailed tax entry with input credit/output tax amount withnegative value and this will be available in the VAT Settlement form for doing VATsettlement.

Note1: The user can also enter the opening balances of Output VAT for type “G/L Account” and “Fixed Asset”.

Note 2: Further all transactions means; purchase and sale will be available for VATsettlement in the VAT Settlement form according to the tax period.

Note 3: Existing VAT reports for example: Intrastate Purchase/Sales, Purchase Book,Sales Book and VAT Deferment will also show the opening transactions.

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Microsoft ® Business Solutions–Navision ® 4.0- Excise Reports

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Annexure 58 .........................................................................................................5 Setup Required .................................................................................................5

Viewing the Posted Transaction ....................................................................7 Viewing the Ledger Entries..........................................................................10 Viewing the Posted Transaction ..................................................................14

Sample Register .................................................................................................19 Setup Required............................................................................................19 Viewing the Posted Transaction ..................................................................21

Waste & Scrap Register......................................................................................29 Setup Required ...............................................................................................29


Inter Unit Transfer Register.................................................................................35 Setup Required ...............................................................................................35

Viewing Inter Unit Transfer Register report..................................................37 Daily Register......................................................................................................40

Setup Required ...............................................................................................40 Viewing Daily Register report.......................................................................43

Monthly Register .................................................................................................46 Viewing Monthly Register report ..................................................................46

ER-1....................................................................................................................49 Set ups for ER-1..............................................................................................49 Company Information......................................................................................49

Assigning the type of unit to E.C.C. Nos. ........................................................50 Viewing the Ledger Entries..........................................................................55 Viewing the Ledger Entries..........................................................................59 Viewing the Ledger Entries..........................................................................66

Report .............................................................................................................72 ER 1 ................................................................................................................72

ER-2....................................................................................................................78 Set ups for ER-2..............................................................................................78

Viewing the Ledger Entries..........................................................................80 Viewing the Ledger Entries..........................................................................84 Viewing the Ledger Entries..........................................................................91

Report.................................................................................................................98 ER 2 ................................................................................................................98

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This feature is developed for the user engaged in manufacturing activity and is submittedthe ER1 or ER 2 return monthly with the excise authority. There are some records whichneed to be maintained by the user as per excise rule though it is not necessary to be

submitted with excise authority like• Annexure 58 (Accountal of return goods)• Registers for Sample• Wastage and Scrap Register • Inter Unit Transfer Register • Raw Material and Component Register Daily• Raw Material And Component Register Monthly

Detailed Setup

Annexure 58The user needs to create Excise setup for the calculation of excise duty and also needsto create Process carried out setup in excise setup.

Sample Register

The user needs to create Excise setup for calculating excise duty and also needs tocreate Location card with a check mark in the Testing Location field.

Waste & Scrap Register

The user needs to create Excise, Sales Tax, and TCS setup for calculating all taxes for scrap item and also needs to place a check mark in the Scrap field in the Item card.

Inter Unit Transfer Register

The user needs to create Excise setup for calculating excise duty and also needs toselect “Intermediate goods” in the Item card based on E.C.C number.

Daily Register

The user needs to create Excise setup for calculating excise duty and also needs tocreate nature of Disposals setup in the Excise setup.

The user needs to select “Intermediate goods” or raw material based on E.C.C number in the Item card

ER 1

In Company Information master, place a check mark in the Large Tax Payer Unit field if the assessee is coming under Large Tax payer under excise rule.

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Choose large tax payer city from the look up list if the assessee is coming under LargeTax Payer.

In the Excise set up E.C.C no assign the type of unit with E.C.C number. Choose thetype of unit from the drop down box. The available options are: Manufacturer and 100 %E.O.U.

In the Excise set up E.C.C no .series assign the number series for LTU RM and LTU IM

In the Item card, define the type of item as Intermediate or Raw Material based on theE.C.C number.

ER 2:

In the Excise set up E.C.C no assign the type of unit with E.C.C number. Choose thetype of unit from the drop down box. The available options are: Manufacturer and 100 %E.O.U.


Following reports are handled by the application• Annexure 58 (Accountal of return goods)• Registers for Sample• Wastage and scrap register • Inter Unit Transfer Register • Raw Material and Component Register Daily• Raw Material and Component Register Monthly• ER 1• ER 2

Reports

Annexure 58This report contains the details of Excisable goods returned from customer and their redispatch if any.

Annexure 58 report provides quantitative and excise details of Return of Excisablegoods and re dispatch if any.

Setup Required

User has to create Excise setup for calculation Excise duty and also needs to createProcess carried out setup in excise setup.

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Process Carried Out

When returned goods have been re-dispatched, the process carried out to rectify thedefected goods should be mentioned in the returned goods register.In the process carried out window define the type of process this will select at the time of re-dispatching the return goods.

NavigationFinancial Management → Setup → Excise → Process Carried Out


Field Description

Code Enter the code for process carried out.The program accepts the values which are,

• Unique• Up to 10 characters

Description Enter the description of process carried outcode.

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Calculation of Excise through Sales order/Invoice for Excisable Goods

Navigation:Financial Management → Setup → Excise → Process Carried Out

To calculate Excise, fill the fields in the Sales Order window as follows:

On the Header:

No : 10000 Structure: Excise

On the Line:

Type : Item No. : 1000 Description : Bicycle Quantity: 10 Unit Price: 4000 Line Amount: 40000

Calculate Structure

Press F9 to view the excise amount

Post the Sales order.


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Navigation:Sales & Marketing → History → Posted Invoice

G/L Entry

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The program creates the following entry:

Particulars Type Amount(Rs)Customer Dr 57920Excise Payable Cr 17920Sales Cr 40000

System will calculate Excise according to the Excise posting setup.

Calculation of Excise in case of sales Return through return OrderIn case when goods has been returned back by the customer for some processlike repair.

Navigation:Sales & marketing → Order Processing → Return Orders

Field Description:

Field Description

Identification Mark Define identification mark for thereturned goods. For example-returnedgoods with identification mark of colour or lot no.

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To create a return order, fill the fields as follows:

Customer: 10000 Location: Location 4 Structure: Excise Applies-to Doc. Type: Invoice Applies-to Doc No: 103411Item: 1000 Quantity: 10 Direct Unit Price : 4000 Line Amount: 40000 (The program will calculate it.)Return reason Code: P-repair Identification mark: Red Coloured Bicycle

Calculate Structure Values.

Post the Return Order.


Navigation:

Sales & Marketing → Order Processing → History → Posted Credit Memos

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G/L entry

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Incase of re-dispatch of returned goodsCreate Sales Order for resale of 5 quantities of bicycle out of 10 returnedquantity, and sale of 1 quantity of touring Bicycle.

Also change the Unit Price of bicycle from 4000 to 5000.

On the header level of sales order place a check in Re-Dispatch field and selectthe Return receipt No. from Posted return receipt Lines.

Navigation:Sales & marketing → Order Processing → Orders

Field Description (Header):

Field Description

Re-Dispatch Place a check mark in the re dispatchfield when the returned goods has redispatched to the customers.

Particulars Type Amount(Rs)Customer Cr 57920Excise Payable Dr 17920Sales Dr 40000

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Return receipt No. This field will be visible only when theRe dispatch field is true. Choose thereturn receipt no from which goods hasreturned to the customers.

Field Description (Line):

Field Description

Process Carried out Select the Process carried out fromlookup list.

To calculate Excise, fill the fields in the Sales Order window as follows: On the Header:

No : 10000 Structure: Excise Re-Dispatch: Place a check mark (Shipping Tab)Return Receipt No.: 107049 (Shipping Tab)

On the first Line:

Type : Item

No. : 1000 Description : Bicycle Quantity: 5 Unit Price: 5000 Line Amount: 25000

On the Second Line:

Type : Item No. : 1001 Description : Touring Bicycle Quantity: 1

Unit Price: 4000 Line Amount: 4000

Calculate Structure



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G/L Entry

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Particulars Type Amount(Rs)Customer Dr 41992Excise Payable Cr 1792Excise payable Cr 11200Sales Cr 4000Sales Cr 25000

System will create two excise entries and also update the Annexure 58 report.

Note: The user can also post the transaction from Sales Invoice.

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Preview Annexure-58 report

Navigation:Financial Management → General Ledger → Reports → Excise Reporting →

Annexure-58


Fields Description

ECC No Choose the ECC number from the lookuplist for which you want to generate thereport.

Customer No Choose customer no for which report is tobe generated.

Item No Choose item no for which report is to begenerated.

Return Rcpt No Choose Posted Return Receipt No. for which report is to be generated.

Start Date Mention the starting date of report is to begenerated

End Date Mention the ending date of report to be

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Fields Descriptiongenerated.

The report contains following columns

Sr Column Heading Comment1 Sr. No This column contains Sr. No of report lines.2 Name & address,

ECC No. Of Manufacturing unit

This field contains Name, Address and ECC No of theLocation.

3 Details of dutypaying Documents& Date

This column contains details of sales returndocument. The program populates external documentno and posting date of sales return document in thiscolumn.

4 Description, Qty. of

Goods Received

This column contains description and quantity of

goods returned.5 Identification Marks This column contains Identification mark of goodsreturned. The program copies the value from ReturnReceipt lines.

6 Name, Address,ECC No. of theCustomer

This column contains Name, Address, ECC No of thecustomer from whom goods returned.

7 Purpose For WhichReceived

This column contains purpose for which goodsreturned from customer. The program populates

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description of return reason code, which is selected inlines of sales return document.

8 Process CarriedOut

This column contains process carried out on itemresold. The program populates description of ProcessCarried Out code, which is selected in lines of salesorder/invoice.

9 Whether anyexcisable goodsare used in repairs/replacements.

This column contains the value Yes or No.Yes: If duty payable on re dispatched goods is

more than proportionate duty reversed (col 11) on sale return then program populatesvalue yes in this column

No: If duty payable on re dispatched goods isnot more than proportionate duty reversed(col 11 ) on sale return then programpopulates value No in this column

10 Duty Paid on suchadditions/replacements

This column contains the value excess duty paid over proportionate duty reversed in col 11 “Cenvat CreditReversed”.

11 CENVAT Credit Availed on returnedgoods

This column contains the value of CENVAT creditavailed on returned goods. The program calculatesthe value as proportionate value of excise duty paidon original sale.

12 CENVAT CreditReversed

This column contains the value of CENVAT CreditReversed on resale. The program populates the valueon the basis of proportionate value of excise credittaken on Sales Return.

13 Details of InvoiceClearance

This column contains the details of Resale:Customer Name,Sales Invoice No,Posting date of sales document andQuantity of re sold goods

14 Qty. of descriptionof goods reclearedseparate accountfor disposal of replaced (defectiveparts removed)parts should bemaintained.

This column contains the details of additional itemsold at the time of resale.The program populates thedescription of such item(s) and Quantity

15 Signature of assessee or hisauthorised agent

The program keeps this field blank for manualsignature of assessee or his authorised agent.

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Sample Register

This report contains details of Excisable item sold as free sample or send for laboratorytest or returned back from laboratory test.

This report is in two sections:

• Free Supply• Lab Test

Setup Required

User has to create Excise setup for calculation Excise duty and also needs to createLocation card with Testing Location “True”

Location Card

Navigation:Warehouse → Setup → Locations

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Field Description:

Field Description

Testing Location

Place a check mark in the Testing

Location field when any sample goodshas been sent to the out side premisesfor laboratory test and which will comeafter testing the sample goods.

Note: It will help to identify how much goods have been sent for the testingpurposes.

Calculation of Excise in case of Free Supply

For Free Supply section program generates report on the basis of Posted SalesOrder and Sales Invoice where “Free Supply” field on Sales Header is checked.When Free Supply field in Sales Order or Sales Invoice header is checked, theprogram populates value in Line Discount % column of Sales Order/Invoice lineas 100. Thus Line amount Excl VAT becomes nil.



On the Header:

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No : 10000 Structure: Excise Free Supply: Place a check mark

On the first Line:

Type : Item No. : 1000 Description : Bicycle Location: Blue Loc Quantity: 10 Unit Price: 4000 Line Amount: Nil Line Discount %: 100

Calculate Structure





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G/L Entry

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Particulars Type Amount(Rs)Sales Cr 40000Discount Dr 40000Excise payable Cr 4320Excise Expense Dr 4320

In this case you have to enter the Excise expense account in general ledger setup.

Incase of Lab Test

Lab Test section of Sample Register report provides details of excisable goodssend to lab test location and returned from lab test location.

In this if excisable goods has been purchased in Blue Loc. And after wardstransferred to testing location through Item Reclass journal.

Item Reclass journal

Navigation:Warehouse → Inventory → Item Reclass. Journal

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Field Description

Field Description

Laboratory Test Place a check mark in the laboratory

Test field when any item is sending for laboratory test to testing location.


Item No.: 1000 Location: blue Loc (Enter the location from where goods have

to be transferred)New Location: Yellow (Enter the testing location, to which goods

has to be transferred)Quantity: 10 Laboratory Test: Yes

Post the Item Reclass. Journal.

After posting program will decrease the quantity in Blue location and increase thequantity in yellow location.

Goods return from testing location after laboratory test.

10 quantities have been sent for laboratory test and 5 have been received from testinglocation. Receive the goods through item Reclass journal by applying the original entry.


Navigation:Warehouse → Inventory → Item Reclass. Journal

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Item No.: 1000 Location: Yellow (Enter the testing location)New Location: Blue Loc (Enter the original Location)Quantity: 5 Laboratory Test: Yes Applies-to entry: 2139


After posting, the program will transfer 5 quantities from Yellow location to Bluelocation.

Report

Sample Register Report

NAVIGATION :

Financial Management → General Ledger → Reports → Excise Reporting → Sample Register

FREE SUPPLY tab

Fields Description:

Fields DescriptionNo. Select the No. of item for which you want

to generate the report.Sell-to Customer No. Select the customer No. for which you

want to generate the report.

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LAB TEST tab

Fields Description:

Fields Description

Item No. Select the Item No. for which you want togenerate the report.

Source No. Select the source No. for which you wantto generate the report.

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Options tab

Fields Description:

Fields DescriptionE.C.C. No. Select the E.C.C. No. for which you want

to generate the report.

Start Date Enter the start date for which you want togenerate the report

End Date Enter the end date for which you want togenerate the report

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Report column

Description of various columns in Sample report for Free Supply section is asfollows

Sr Column Heading Comment1 Date This column contains the date on which free sample

sold.2 Item Description This column contains the description of Item sold.3 Type of Sample This field contains the text “FREE SUPPLY”.

Since in this section of report the program consider Sales Invoice lines where value in Free Supply field ischecked, the program populates the text “FREESUPPLY”

4 Name of TestingLocation

Not relevant for FREE SUPPLY section

5 Name of Customer This field contains the Name of customer.6 Invoice No This field contains Sales Invoice No.7 Quantity This field contains the Quantity of Free Sample sold.8 Assessable Value This field contains the value of Assessable amount on

which excise duty is calculated.9 Excise % This field contains effective rate excise duty payable.

The program calculates the rate as,Excise % = Excise Amount (Col 10) * 100

Assessable Value (Col 8)10 Excise Amount This field contains the total amount of Excise duty

payable.The program copies the value in this field from Excise

amount field in Sales Invoice Line.11 Date of Return Not relevant for FREE SUPPLY section12 Quantity Returned Not relevant for FREE SUPPLY section13 Remaining Quantity Not relevant for FREE SUPPLY section

The report contains following columns for LAB Test

Sr Column Heading Comment1 Date This field contains the date on which goods send to

testing location.The program copies value in this field from postingdate field in Item Ledger Entry.

2 Item Description This field contains the description of item send totesting location.

3 Type of Sample This column contains the text “LAB TEST”.Since in this section of report the program consider Item Ledger Entry lines where value in LaboratoryTest field is checked, the program populates the text“LAB TEST”

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4 Name of TestingLocation

This field contains the name of testing location.

5 Name of Customer Not relevant for LAB TEST section6 Invoice No This field contains the Document no on which goods

transferred to testing location.The program copies the value in this field fromDocument No field in Item Ledger Entry.

7 Quantity This field contains the Quantity of item transferred totesting location.The program copies the value in this field fromQuantity field in Item Ledger Entry.

8 Assessable Value Not relevant for LAB TEST section9 Excise % Not relevant for LAB TEST section10 Excise Amount Not relevant for LAB TEST section11 Date of Return This field contains the date on which goods returned

from Testing Location.The program copies the value in this field fromPosting Date field in Item Ledger Entry.

12 Quantity Returned This field contains the quantity of goods returned fromTesting Location.The program copies the value in this field fromQuantity field in Item Ledger Entry.

13 Remaining Quantity This field contains remaining quantity to be returnedfrom testing location.The program populates the value by deductingreturned quantity quantities from dispatched quantity

Waste & Scrap RegisterThis report contains details of Sales of excisable items which are defined as Scrap Itemin item card. The program checks whether item is defined as Scrap or not at the time of generating the report. This report is based on Posted Sales Invoice. The programconsiders only invoiced quantity.

Setup Required

User has to create Excise, Sales tax, TCS setup for calculation of all taxes for scrap itemand also needs to place a check mark in scrap field in Item card.

Item CardNAVIGATION :Purchase → Planning → Items

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Place a check mark in scrap filed in item card

Calculation of Excise, VAT and TCS on Scrap item through SalesOrder/invoice


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To calculate Excise, VAT and TCS, fill the fields in the Sales Order window asfollows:

On the Header:

No : 10000 Structure: Taxes (Type in structure is Excise and Sales Tax)

On the Line:

Type : Item No. : 1100 Description : Front Wheel Quantity: 10 Unit Price: 1000 Line Amount: 10000 TCS Nature of Collection: A

Calculate Structure and calculate TCS

Press F9 to view the excise, Tax and TCS amount




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G/L Entry


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Particulars Type Amount(Rs)Sales Cr 10000Sales tax A/C(Sales)

Cr 900

Excise payable Cr 3480TCS Payable Cr 1507Customer Dr 15887

System will also create Excise entry, TCS entry and Detailed Tax entry with relevantinformation.

Preview Waste & Scrap Register reportNAVIGATION : Financial Management → General Ledger → Reports → Excise Reporting → Waste & Scrap Register

Sales Invoice tab

Fields Description:

Fields Description

No. Select the No. of Item for which you wantto generate the report.

Sell-to Customer No. Select the customer No. for which youwant to generate the report.

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Options tab

Fields Description:

Fields Description

E.C.C. No. Select the E.C.C. No. for which you wantto generate the report.



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System will generate the report with all relevant fields of Excise, VAT, charges and TCS.

Inter Unit Transfer RegisterThis report contains the details of Excisable goods transferred from one location toanother.

Setup Required

User has to create Excise setup for calculation Excise duty and also needs to select“Intermediate goods” in Item card.

Item Card

NAVIGATION :Purchase → Planning → Items → Item → ECC No. /Item Categories.

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Select type of Item as “Intermediate” for E.C.C. no.

Transfer Order

Navigation:Purchase → Order Processing → Transfer Orders

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To calculate Excise, fill the fields in the transfer Order window as follows:

On the Header:

No : 1132 Transfer from code : Manf. Loc Transfer to Code : manufact In-transit Code : Out. Log Structure: Excise

On the Line:

Item No .: 1000 Description : Bicycle Quantity: 10 Transfer Price: 1000 Amount: 10000

Calculate Structure

Post the Transfer Order as Ship and Receive. After posting, the program will create the G/L entries, excise entries in both the locations.

Viewing Inter Unit Transfer Register report

NAVIGATION : Financial Management → General Ledger → Reports → Excise Reporting → Inter UnitTransfer Register

Generate report for shipping location “MANF. LOC ”

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Options tab

Fields Description:

Fields Description




For E.C.C. No. of Shipping location report will show the Issue details, for example, thelocation you have issued the goods to.

Generate report for receiving location “MANUFACT”

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Options tab

Fields Description:

Fields Description


Start Date Enter the start date of the date range for which you want to generate the report

End Date Enter the end date of the date range for

which you want to generate the report

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For E.C.C. No. of receiving location report will show the receipt details, for example fromwhich location you have received the goods.

Daily RegisterThis report contains details of daily movement of inflow and outflow of excisable goodsunder various heads.

Setup Required

User has to create Excise setup for calculation Excise duty and also needs to createnature of Disposals setup in excise setup.

NavigationFinancial Management → Setup → Excise → Nature of Disposals

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Fields Description:

Fields DescriptionType Choose the type of nature of disposal from

the drop down box, the option of the natureof disposal are Purchase return ,Transfer shipment, Sale ,Negative adjustment. If theset up for nature of disposal is not defiedthan in the raw material & componentregister the field will be populated againstthe nature of disposal is blank

Code Define the code for the type field and it willbe populated in the report as it defined inthe code field.

Description Enter the description of code

Item Card

NAVIGATION :

Purchase → Planning → Items → Item → ECC No. /Item Categories.

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Also define the type of item as “Raw Material” in Item card for particular E.C.C. No.

In case of Disposal and Wasted & Destroyed

In this case post the transaction through item reclass Journal if the items are disposed or Wasted/destroyed.


Navigation:Warehouse → Inventory → Item reclass. Journal

Fields Description:

Fields DescriptionOther Usage Select the other usage from drop down

button. The available options are Disposal,wasted/destroyed.

Nature of Disposal Select the nature of disposal from lookuplist.

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First Line

Entry type: Negative Adj.Item No.: 1000 Location: Blue Quantity: 50 Other Usage: Disposal Nature of Disposal: Fire

Second Line

Entry type: Negative Adj.Item No.: 1000 Location: Blue Quantity: 100 Other Usage: Wasted/Destroyed


System will create item ledger entries with negative adj. and also will update the dailyregister with other usage and nature of disposal.

Viewing Daily Register report

NAVIGATION :

Financial Management → General Ledger → Reports → Excise Reporting → DailyRegister

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Item Ledger Entry tab

Fields Description:

Fields DescriptionLocation Code Select the location code for which youwant to generate the report

Options tab

Fields Description:

Fields Description


Start Date Enter the start date of the date range for which you want to generate the report

End Date Enter the end date of the date range for which you want to generate the report

Item No Select the item no. for which you want togenerate the report

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System will generate the report with all the relevant information.

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The report contains following columnsSr Column Heading Comment1 Description of Raw

Material/ComponentThis column contains description of item.

2 Opening Balance This column contains opening balance of item.3 Quantity Received This column contains quantity received of item

during the period given in report filter.4 Unit This column contains unit of measure code.5 Total This column contains total of opening balance and

quantity received.6 Excisable

GoodsThis column contains quantity consumed in themanufacturing of excisable goods.

7

Quantityused inthemanufacture of

Other Goods

This column contains quantity consumed in themanufacturing of other goods.

8 Nature of Disposal

This column contains the nature of disposal.

9

Quantityotherwisedisposedof

Quantity This column contains quantity disposal of other than consumption or wastage.

10 Quantity wasted or destroyed

This column contains quantity of item wasted or destroyed.

11 Closing Balance This column contains closing balance of item atthe end of given period.

12 Quantity of Excisablegoods manufactured

This column contains total output of excisablegoods, if any, for which item consumed.

13 Quantity of other goodsmanufactured

This column contains total output of other goods, if any, for which item consumed.

14 REMARKS Program keeps this column blank for remarks.15 Signature of the

Assessee or his agent

Program keeps this column blank for manual

signature of the assessee or his agent.

Monthly Register

This report contains details of Monthly movement of inflow and outflow of excisablegoods under various heads.

Viewing Monthly Register report

Navigation:Financial Management → General Ledger → Reports → Excise Reporting → MonthlyRegister .

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Item tab

Fields Description:

Fields DescriptionNo Select the Item No. for which you want to

generate the report

Options tab

Fields Description:

Fields DescriptionE.C.C. No. Select the E.C.C. No. for which you want

to generate the reportMonth Select the month from drop down button

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Fields Descriptionfor which you want to generate the report.

Year Enter the year for which you want togenerate the report.

System will generate the report on monthly basis.

The report contains following columns:

Sr Column Heading Comment1 Date This column contains dates of month given in report

filter.2 Opening Balance This column contains opening balance of item.3 Quantity Received This column contains quantity received.4 Unit This column contains unit of measure code.5 Total This column contains total of opening balance and

quantity received.6 Excisa

bleGoods

This column contains quantity consumed in themanufacturing of excisable goods.

7

Quantityused inthemanufacture of

Other Goods

This column contains quantity consumed in themanufacturing of other goods.

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8 Natureof Disposal

This column contains the nature of disposal.

9

Quantityotherwisedisposedof

Quantity

This column contains quantity disposal of other thanconsumption or wastage.

10 Quantity wasted or destroyed

This column contains quantity of item wasted or destroyed.

11 Closing Balance This column contains closing balance of item.12 Quantity of

Excisable goodsmanufactured

This column contains total output of excisable goods,if any, for which item consumed.

13 Quantity of other goodsmanufactured

This column contains total output of other goods, if any, for which item consumed.

14 REMARKS Program keeps this column blank for remarks.15 Signature of the

Assessee or hisagent

Program keeps this column blank for manualsignature of the assessee or his agent.

ER-1

Set ups for ER-1

Company Information

Navigation: Administration → Application Setup → General → Company Information

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Fields Description:

Field Description Large Tax Payer Place a check mark in the Large Tax Payer

Unit field if the company is categorized aslarge tax payer unit as per excise rule.

Large Tax payer city Choose the city code of the large tax payer unit from the look up list.

Assigning the type of unit to E.C.C. Nos.

Navigation:Financial Management → Set Up → Excise → E.C.C.Nos

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Fields Description:

Field Description Type of Unit Choose the type of unit from the drop

down box. The available options are:Manufacturer and 100 % E.O.U. It will helpin generating different type of returnswhich are submitted with the exciseauthority.

For exampleFor manufacturer, ER 1 return to besubmitted with the excise authority.For 100 % E.O.U, ER 2 return to besubmitted with the excise authority

Navigation:Financial Management → Set up → Excise → Excise No Series

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Fields Description:

Field DescriptionLTU RM Choose the number series from the look

list.

In the ER -1 return, the number of transfer challan, used in the inter unit by the largetax payer unit for the raw material which iscoming under Rule 12A of CENVAT creditrule 2004 will be populated in the topic ‘d’of table 10.

LTU IM Choose the number series from the looklist.

In the ER -1 return, the transfer challannumber used in the inter unit by the largetax payer unit with out payment duty, is tobe specified in the topic‘d’ of table 10.

Navigation:Purchase → Planning → Item → E.C.C No /Item Categories

In the Item Card, click the Item menu button.

The following form opens:

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Fields DescriptionField DescriptionItem No By default the item number will get

populated from the Item Card.

E.C.C.No Choose the E.C.C. number from the lookup list.

Type of Item Choose the item as Raw Material or Intermediate Goods from the drop downbox. If the type of item is not definedaccording to the E.C.C number, then theInter unit Transfer register and ER 1Return table No-4 and 5 will not getpopulated

The following transactions are necessary to populate the ER1 return:

• Purchase of excise able goods, sales return, and sales credit memo whereCENVAT credit has taken through Purchase Invoice /Order/Sales ReturnOrder./Sales Credit Memo

• Manufacture of finished goods with excise product posting group.• Sale of goods through Sales Order, Invoice, and Transfer Shipment• Utilization of service tax credit for excise payment• Utilization of excise credit for service tax payment• Deposition of TR-6 challan in Public Ledger Account (PLA) through Journal and

updation of the challan details through Periodical Activities in PLA form.• Settlement of the excise liability through the Settlement form from the followings:

RG 23A, RG 23 C, PLA, Service Tax Credit.

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• If any excise charge liability has been paid then with Periodical Activities updatethe ER 1 payment type and assign the amount to: Arrears of duty under rule 8,Interest Payment, and so on.

Transactions

Navigation:Purchase → Order Processing → Orders

To create a purchase order, fill the fields as follows:

Vendor: 10000 Vendor type: Manufacturer Location: 5555

Structure: Excise Item: 70204 Quantity: 1000 Direct Unit Cost : 50 Line Amount: 50000 (The program will calculate it.)


The program will calculate excise according to the defined setupsPost the order with Receive and Invoice.

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Navigation:Purchase → Order Processing → History → Posted Invoices

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View the G/L entries

In the excise entry you will find the BED and E Cess amount according to the set up.

In the above window you can see the followings:

BED Amount: RS 5000ECess Amount: Rs 100

This amount will be shown in the ER 1 return column number 8 under credit taken oninput on invoice issued by the manufacturer of CENVAT credit availed and utilized.

Note 1: Incase of excisable capital goods, purchased and CENVAT amount will be showin ER 1 return according to the vendor type.

Note 2: If CVD is calculated and the item is input in the Purchase Invoice, then it will beshown in credit taken on imported goods irrespective of vendor type. If no CVD iscalculated then the program will check the vendor type. If the vendor type is Importer

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then it will be shown in the credit taken on imported inputs if the item is not a capitalgoods.

To create an output for a finished goods the following steps to be followed

• Create a item card where the following fields to be filled

Item No: 70206 Description: MS Finished goods Gen. Product Posting Group: retail Excise Product Posting Group: 16.32 Inventory Posting Group: Finished Replenishment System: Production Production BOM No: P00040 where raw material No-70204 has been

attached with quantity-2

• Released production order through Manufacturing → Execution → ReleasedProduction Order

Quantity: 200 Due Date: 05/04/06 Location: 5555

• Create consumption journal for the above production with location as: 5555• Create out put for the finished goods number: 70206

Quantity: 200 Location: 5555

ER 1 report with the Excise Product Posting Group as : 16.32, will show the quantitymanufactured as: 200 in table number 3 of Details of manufacture, clearance and dutypayable.

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Sales Order

Navigation:Sales & Marketing → Order Processing → Orders

To create a Sales order, fill the fields as follows

Customer: 20000 Location: 5555 Structure: Excise Item: 70206 Quantity: 30 Direct Unit Cost : 300

Line Amount: 9000 (The program will calculate it.)


The program will calculate excise according to the defined setups

Post the Order with Ship and Invoice.

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Navigation:Sales &Marketing → History → Posted Invoices

In the G/L entry, the following entry has been made by the program

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BED 10% eCess 2% Line Amount Rs9000 = 30*300 BED Amount Rs9000*10/100 =900 eCess 900*2/100 =18 Total Duty Amount 900+18 =Rs918

In the Excise Entries, the following duty amount as shown in the image below arecreated

Now in the ER1 return following amount of data you will find against the Excise ProductPosting Group as: 16.32

Quantity 30 Rate of Duty CENVAT % 10 e Cess 2% Duty Amount Rs 900 eCess Rs 18

Note: Excise product posting group makes different group in the Details of themanufacture, clearance, and duty payable, under the following cases

• Incase rate of duty is different for different finished goods of same excise productgroup, it will make different group for rate of duty.

• For supplementary bill, it makes different group for the same excise productposting group

• For intermediate goods, in case of large payer tax unit it makes different groupfor same excise product group

• For goods removed as such it makes different group for same excise productposting group

Excise credit utilized for service tax payment

The following steps to be followed

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1. Create a purchase order and calculate the excise amount

Vendor: 20000 Vendor type: Ist stage dealer Location: 5555




Now the BED amount is RS300 and eCess amount is Rs6

Under “Credit taken on input on invoice issued by I or II stage dealer” topic in table 8, theER 1 return will show Rs 300 in the CENVAT field and Rs 6 in the eCess column.

2. Place a check mark in the Excise as Service Tax field

Navigation:Financial Management → General Ledger → Periodical Activities → Service Tax→ Excise as Service Tax

Place a check mark in the Excise as Service Tax field.

3. Create a purchase invoice and fill the following fields

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Vendor: 10000 Location: 5555 Service tax registrationfor location 5555 5555SER

Structure: ServiceG/L Account: 8410 Quantity: 1 Payment method CashDirect Unit Cost : 10000 Line Amount: 10000 ( The program will calculate service

according to the defined setup)

Post the order with Receive and Invoice.Now the Service tax amount is RS1000 and eCess amount is Rs20.

Under “Credit taken on input service” topic in table 8, the ER 1 return will show Rs 1000in the Service Tax columnand Rs 20 in the eCess on taxable service column.

4. Create a sales invoice and fill the following fields

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Customer 1 0000 Location: 5555 Structure: ServiceG/L Account: 8410 Quantity: 1 Direct Unit Cost : 20000 Payment method CashLine Amount: 20000 ( The program will calculate service

according to the defined setups

Post the order with Receive and Invoice.

Now the Service tax amount is RS 2000 and eCess amount is Rs40

5. Settle the service tax liability through Excise Credit and Service TaxCredit

Navigation:Financial Management → General Ledger → periodical activities → Service Tax → Payment

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Click Apply Entries

You need to keep the cursor in the Excise as Service Credit line then click the Linemenu button, and then select the Excise as cenvat claim

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From the RG 23A you can utilize RS 300 and Rs 6 from eCESS

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Particulars Service tax liability eCess on service tax

liability A/C no-5923 2000 40Setoff against RG-A/C no2993

300 6

Setoff against service taxcredit-A/C No 2998

500 10

Payment through cash-A/CNo 2910

1200 24


Navigation:Financial Management → General Ledger → History → Register

In the ER 1 return

Under “Credit taken on inputs on invoices issued by I or II stage dealers” topic in table 8,the ER 1 return will show Rs 300 in the Service Tax column and Rs 6 in the eCess onTaxable Service column.

Under “Credit utilised for payment of tax on services” topic in table 8, the ER 1 return willshow Rs 300 in the CENVAT column, Rs 6 in the eCess on exisable goods column, Rs800(Rs 300+Rs500) in the Service Tax column, and Rs 16 in the eCess on Service Taxcolumn.

Depositing the amount into PLA

Navigation:Financial Management → General Ledger → General Journal

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Fill the following field in the General Journal window

Place a check mark in the PLA field

PLA BED Amount Rs50000 PLA eCess Amount Rs10000 PLA Excise Charge Amount Rs30000

Under “Add TR-6/GAR-7 Challan Payments made in the month (in aggregate)” topic intable 7, the ER 1 return will show Rs 90000 in the Amount column.

Under “Self assessment memorandum” topic in table 10, the ER 1 return will show Rs90000 in the During the month, total Rs. column.

Updating the challan details

Navigation : Financial Management → General Ledger → Periodical Activities → Excise → PLA → PLA form

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On the Function menu button, click the Update Challan Detail

Click OK after entering the challan details

Settlement of excise duty liability

Navigation : Financial Management → General Ledger → General Journal

Document Type: Payment G/L Account: 2994 E.C.C No: 5555

Click Apply Entries

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Particulars Excise Duty Liability eCess on Excise Liability900 18

Setoff against RG-A/C no2993

500 18

Set off against PLA 400

Post the journal

Under “CENVAT” topic in table 6, the ER 1 return will show Rs 400 in the Accountcurrent (Rs.) column and Rs 500 in the Credit account (Rs.) column.

Under “eCess” topic in table 6, the ER 1 return will show Rs 18 in the Credit account(Rs.) column.

Under “Credit utilised for payment of duty on goods” topic in table 8, the ER 1 return willshow Rs 500 in the CENVAT column and Rs 18 in the eCess on excisable goodscolumn.

Settlement of excise charge liability

Navigation :Financial Management → General Ledger → General Journal

Create the excise charge liability


Place a check mark in the Excise Charge field

Enter the excise charge amount as Rs -20000

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Now Rs 20000 as excise charge liability has been created for the E.C.C No-5555

Make the payment for excise charges

Click Applied Entries.

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Enter the excise charge amount as Rs 20000 against PLA

Post the journal

Now Rs 20000 will get populated in table 7 (Abstract of current account )under utilization towards the other payments made during the month .

Assigning the amount Rs 20000 into Arrears of duty, Interest, and so on

Navigation : Financial Management → General Ledger → Periodical Activities → Excise → Update ER 1 Payment Type

Click the Update Payment Type in the Function menu button.

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Select the entry and click the Update Payment Type in the Function menu button.The following form opens.

Enter the amount in the fields. These will be populated in the ER 1 report.

Procedure for Inter unit transfer of intermediate goods by large tax payerunit

• Create item-70251 (MS intermediate) which is an intermediate goods for the locationE.C.C 5555 and for location E.C.C No GOA 123

• Create the Transfer Order with the following information:

Transfer from Code: 5555

Transfer to Code: GOAQuantity: 5Structure: BlankSelect Item: 70251Posting Date: 15/04/06

Now ER I return, for Excise Product Posting Group 16.32 will create separate group for inter unit transfer by large payer tax unit in table 3 and clearance details of inter unittransfer of intermediate goods will be shown with the qty as 5 which has been sent toGOA location with excise product posting group in table 4..

Report

ER 1

Navigation:

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Financial Management → General Ledger → Reports → Excise Reporting → ER 1


Fields DescriptionReturn for the Month of Choose the month from the drop down box

for which the ER 1report to be generated

Return for the Location of Choose the location ECC number from thelookup list for which you want to generatethe report.

Year Define the year for which ER 1 return to begenerated.

Note:Credit utilized for goods removed as such and inter unit transfer bylarge tax payer unit.

In the request form for generating the ER1 return, you can manually enter the amount inthese field and it will automatically reduce the amount of credit utilized for payment of goods and the amount will get populated in the credit utilized when input or capital goodsremoved as such and credit utilized for inter unit transfer by a large payer tax unit.

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Entered amount will not store in any table it will only help to get the printout of ER1return.

Preview of the ER1 return.

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ER-2

Set ups for ER-2

Navigation:Financial Management → Set up → Excise → E.C.C.Nos

Fields Description:

Field DescriptionType of unit Choose the type of unit from the drop

down box. The available options are:Manufacturer and 100 % E.O.U. It will helpin generating different type of returnswhich are submitted with the exciseauthority.

For exampleFor manufacturer, ER 1 return to besubmitted with the excise authority.For 100 % E.O.U, ER 2 return to besubmitted with the excise authority

The following transactions are necessary to populate the ER2 return:

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• Purchase of excise able goods, sales return, and sales credit memo where

CENVAT credit has taken through Purchase Invoice /Order/Sales ReturnOrder./Sales Credit Memo

• Manufacture of finished goods with excise product posting group.• Sale of goods through Sales Order, Invoice, and Transfer Shipment• Utilization of service tax credit for excise payment• Utilization of excise credit for service tax payment• Deposition of TR-6 challan in Public Ledger Account (PLA) through Journal and

updation of the challan details through Periodical Activities in PLA form.• Settlement of the excise liability through the Settlement form from the followings:

RG 23A, RG 23 C, PLA, Service Tax Credit.• If any excise charge liability has been paid then with Periodical Activities update

the ER 2 payment type and assign the amount to: Arrears of duty under rule 8,Interest Payment, and so on.

Transactions


To create a purchase order, fill the fields as follows:

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Vendor: 10000 Vendor type: Manufacturer Location: 6666





Navigation:Purchase → Order Processing → History → Posted Invoices

View the G/L entries

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In the excise entry we will find the amount of BED and E cess amount according to setup

In the above window you can see the followings:

BED Amount: RS 5000ECess Amount: Rs 100

This amount will be shown in the ER 2 return table no 6 under credit availed on input of CENVAT credit availed and utilized.

Note 1: Incase of excisable capital goods, purchased and CENVAT amount will be showin ER 2 return under topic “Credit availed on capital goods”

To create an output for a finished goods the following steps to be followed

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• Create a item card where the following fields to be filled

Item No: 70206 Description: MS Finished goods Gen. Product Posting Group: retail Excise Product Posting Group: 16.32 Inventory Posting Group: Finished Replenishment System: Production Production BOM No: P00040 where raw material No-70204 has been

attached with quantity-2 of unit of measurement K.G

• Released production order through Manufacturing → Execution → ReleasedProduction Order

Quantity: 200 Due Date: 06/04/06 Location: 6666

• Create consumption journal for the above production with location as: 6666• Create out put for the finished goods number: 70206

Quantity: 200 Location: 6666

ER 2 report with the Excise Product Posting Group as : 16.32, will show the quantitymanufactured as: 200 in table number 3 of Details of manufacture, clearance and dutypayable.

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Sales Order


To create a Sales order, fill the fields as follows

Customer: 20000 Location: 6666

Structure: Excise Item: 70206 Quantity: 30

Direct Unit Cost : 300 Line Amount: 9000 (The program will calculate it.)


The program will calculate excise according to the defined setupsPost the order with Ship and Invoice.

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Navigation:Sales &Marketing → History → Posted Invoices

In the G/L entry, the following entry has been made by the program.

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BED 10% eCess 2% Line Amount Rs9000 = 30*300 BED Amount Rs9000*10/100 =900 eCess 900*2/100 =18 Total Duty Amount 900+18 =Rs918

In the Excise Entries, the following duty amount as shown in the image below arecreated

Now in the ER 2 return following amount of data you will find against the Excise ProductPosting Group as: 16.32

Quantity 30 Rate of Duty CENVAT % 10 e Cess 2% Duty Amount Rs 900 eCess Rs 18

Note: Excise product posting group makes different group in the Details of themanufacture, clearance, and duty payable, under the following cases

• Incase rate of duty is different for different finished goods of same excise productgroup, it will make different group for rate of duty.

• For supplementary bill, it makes different group for the same excise productposting group

• For goods removed as such it makes different group for same excise productposting group

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Excise credit claimed for service tax payment

The following steps to be followed

1. Create a purchase order and calculate the excise amount

Vendor: 20000 Location: 6666

Structure: Excise Item: 70207 Quantity: 1Direct Unit Cost : 10000 Line Amount: 10000 (The program will calculate it.)



Now the BED amount is RS 1000 and eCess amount is Rs20

Under “Credit availed on capital goods” topic in table 6, the ER 2 return will show Rs 500in the CENVAT field, Rs 10 in the eCess column, As it is a capital item 50% of credit willbe taken in the current year and 50% will be taken in next year

2. Place a check mark in the Excise as Service Tax field

Navigation:


General Ledger →

Periodical Activities →

Servicetax → Excise as Service Tax

Place a check mark in the Excise as Service Tax field.

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3. Create a purchase invoice and fill the following fields

Vendor: 10000 Location: 6666

Service Tax Registrationfor location 6666 6666 SR

Structure: Service G/L Account: 8410 Quantity: 1Payment method Cash Direct Unit Cost : 10000 Posting date 01/04/06 Line Amount: 10000 ( The program will calculate service


Post the order with Receive and Invoice.Now the Service tax amount is RS1000 and eCess amount is Rs20.

Under “Credit taken on input service” topic in table 6, the ER 2 return will show Rs 1000in the Service Tax column and Rs 20 in the eCess on taxable service column.

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4. Create a sales invoice and fill the following fields

Customer 10000 Location: 6666 Structure: Service G/L Account: 8410 Quantity: 1Direct Unit Cost : 20000 Payment method : Cash Line Amount: 20000 (The program will calculate service


Post the order with Receive and Invoice.Now the Service tax amount is RS 2000 and eCess amount is Rs40

5. Settle the service tax liability through excise credit and service taxcredit

Navigation:Financial Management → General Ledger → periodical activities → Service Tax → Payment

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Click Apply Entries

You need to keep the cursor in the Excise as Service Credit line then click the Linemenu button, and select the Excise as cenvat claim

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From the RG 23C you can utilize RS 500 and Rs 10 from eCESS.

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Particulars Service tax liability eCess on service tax

liability A/C no-5923 2000 40Setoff against RG-23C 500 10Setoff against service taxcredit-A/C No 2998

1000 10

Payment through cash-A/CNo 2910

500 20


Navigation : Financial Management → General Ledger → History → Register

In the ER 2 return

Under “Credit availed from capital goods” topic in table 6, the ER 2 return will show Rs500 in the Service Tax column and Rs 10 in the eCess on Service Tax column.

Under “Credit utilized for payment of duty on services” topic in table 6, the ER 2 returnwill show Rs 500 in the CENVAT column, Rs 10 in the eCess column, Rs 1500 (Rs1000+Rs500) Service Tax column, and Rs 20 (Rs10+Rs10) in the eCess on TaxableServices column.

Depositing the amount into PLA


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Fill the following field in the General Journal window

Place a check mark in the PLA field

PLA BED Amount Rs50000 PLA eCess Amount Rs10000 PLA Excise Charge Amount Rs30000 E.C.C No 66666 Total Amount RS 90000

In table 8, “During the month total Rs” get the value as 90000

Updating the challan details

Navigation : Financial Management → General Ledger → Periodical Activities → Excise → PLA → PLA Form

In the Function menu button, click the Update Challan Detail

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Click the OK button after entering the challan details

Settlement of excise duty liability



Click Apply Entries

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Particulars Excise duty liability eCess on Excise liability900 18

Setoff against RG-A/C no2993

518

Set off against PLA 400Post the journal

Under “CENVAT” topic in table 4, the ER 2 return will show Rs 400 in the Accountcurrent (Rs.) column and Rs 518 in the Credit account (Rs.) column.

Under “ Credit utilized for payment of duty on goods ” topic in table 6, the ER 2 returnwill show Rs 518 in the CENVAT column.

Settlement of excise charge liability

Navigation :Financial Management → General Ledger → General journal

Create the excise charge liability


Place a check mark in the Excise Charge field

Enter the excise charge amount as Rs -11000Now Rs 11000 as excise charge liability has been created for the E.C.C No-66666

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Make the payment for excise charges

Click Applied Entries.

Enter the excise charge amount Rs 11000 against PLA

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Post the journal.

Assigning the amount Rs 11000 into arrears of duty ,Interest so on

Navigation : Financial Management → General Ledger → Periodical Activities → Excise → Update ER2 Payment Type

Click the Update Payment Type in the Function menu button

Select the entry and click the Update Payment Type in the Function menu button.The following form opens.

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Enter the amount in the fields. These will be populated in the ER 2 report.

Procedure for Input or capital goods received without payment • Create item-70208 (MS goods)• Excise Posting Group 16.34• Notification No-WODUTY• CTSH No-16.345• Quantity-5Create a purchase order where the structure is blank

Structure-BlankSelect item as 70208Posting date-15/04/06Now in table no 5 of ER 2 return, it will show the product posting group 16.34 withcustom tariff heading and value of the goods.

To view this table the following conditions are necessary:

1) Excise product posting set up notification no. and serial no. of notification are must2) No excise duty is to be calculated

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Report

ER 2

Navigation :Financial Management → General Ledger → Reports → Excise Reporting → ER 2


Fields Description

Return for the Month of Choose the month from the drop down boxfor which the ER 2 report to be generated

Return for the location of Choose the location ECC number from the

lookup list for which you want to generatethe report.

Year Enter the year for which ER 2 return to begenerated.

Note:

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Credit utilized for goods removed as such:

In the request form for generating the ER 2 return, you can manually enter the amount inthese field and it will automatically reduce the amount of credit utilized for payment of goods and the amount will get populated in the credit utilized when input or capital goodsremoved as such.

Entered amount will not store in any table it will only help to get the printout of ER 2return.

Preview of the ER 2 return:

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Microsoft ® Business Solutions–Navision ® 4.0- Additional Duty of Custom

& Special CVD in Lieu of VAT

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Setups Required ...................................................................................................4 Excise Setup .....................................................................................................5

Duties ............................................................................................................6 Posting Setup ................................................................................................7 Claim Setoff ...................................................................................................9

Structure..........................................................................................................11 Calculation of CVD and ADC through Purchase Transactions ...........................12

Calculation of CVD in case of Normal Item through Purchase Order/Invoice..12 Viewing the Posted Transaction ..................................................................13

Calculation of CVD in case of Capital Item through Purchase Order/Invoice ..20 Viewing the Posted Transaction ..................................................................21

Calculation of CVD through purchase Credit Memo........................................30 Viewing the Posted Transaction ..................................................................31

Calculation of CVD through Sales Order .........................................................38 Viewing the Posted Transaction ..................................................................39

Calculation of CVD through Transfer Order ....................................................44 Transfer of Normal Items .............................................................................44 Viewing the Posted Transaction (Transfer Shipments) ................................45 Viewing the Posted Transaction (Transfer Receipts)...................................50 Transfer of Capital Items .............................................................................57 Viewing the Posted Transaction (Transfer Shipments) ................................58 Viewing the Posted Transaction (Transfer Receipts)...................................65

Excise CENVAT Claim ....................................................................................74 Calculation of CVD and ADC in case of Trading Items.......................................79

Calculation of CVD in case of Trading Item through Purchase Order .............79 Viewing the Posted Transaction ..................................................................80

Calculation of CVD in case of Trading Item through Sales Order....................86 Viewing the Ledger Entries..........................................................................87

Calculation of CVD in case of Trading Item through Purchase Return Order..93 Viewing the Ledger Entries..........................................................................94

Calculation of CVD in case of Trading Item through Sales Return Order......100 Viewing the Ledger Entries........................................................................101

Goods Purchased for Trading and Further Transferred for Manufacturing .......107

Transfer of Goods to Manufacturing Unit from Trading Unit ..........................107 Viewing the Ledger Entries........................................................................109

Capital Goods Purchased for Trading and further Transferred for Manufacturing..........................................................................................................................115

Transfer of Capital Goods to Manufacturing Unit from Trading Unit..............115 Viewing the Ledger Entries........................................................................117

Appendix...........................................................................................................123

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Additional duty of Custom (CVD) equivalent to duty of excise and Additional duty of customs equivalent to value Added tax, Sales Tax, or local tax are specified for thepurpose of eligibility of CENVAT.

Additional duty of customs equal to the, excise duty leviable on like goods produced or manufactured in India. This is levied under Section 3 of Customs Tariff Act, 1975. This isusually referred to as "Countervailing Duty" (CVD). However, the correct description of this duty is Additional Duty of Customs. In order to determine the applicable rate, theuser has to obtain the correct classification of the goods under the Central Excise Tariff

Act, 1986. The duties under the Central Excise Tariff are on ad valorem basis. However,specific rates have been prescribed for some items.

Detailed Setup

CVD functionality contains the detailed setup of Excise and Structure which you need tocreate before calculating CVD and ADC VAT.

Followings are the setups required for calculating CVD and ADC.

• Excise• Structure• Claim Setoff


Following are the comprehensive functionalities covered under CVD in case of NormalItems and Capital Goods:

• Calculation of CVD and ADC VAT through Purchase, Sale Order/Invoice.• Updation of RG 23 A/C Part I & II registers.• Additional duty in lieu of VAT is not available for deferments in case of purchase

of capital item.• Additional duty component is not available for settlement of service tax on output

service.•

Settlement of one duty element against multiple sub-duty elements• Calculation of CVD in case of purchase of trading items.• CVD can also be calculated while transferring goods from trading unit to

manufacturing unit.• Updating RG 23 D and Quarterly Return for Traders reports.

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Reports

All statutory reports related to excise for example RG 23 A Part I & II, RG 23 C Part I &II, RG 23 D, and Quarterly Return for Traders will get updated with this functionality .

Setups Required

Followings are the setups required to be fill for calculating CVD and ADC.


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Excise Setup

Navigation:Financial Management → General Ledger → Setup → Excise

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Duties

Navigation:Financial Management → General Ledger → Setup → Excise → Duties

In the Excise Duties setup, following new codes has been introduced for the calculationof CVD and ADC:

• ADC VAT Amount• BCD Amount• CIF Amount• SHE CESS Amount

These codes will be used for setting up the calculation formulas in the Excise Postingsetup .

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Posting Setup

Navigation:Financial Management → General Ledger → Setup → Excise → Posting Setup

Fill in the fields according to these guidelines for calculating CVD and ADC:

Fields Description

Excise Bus. Posting Group Choose the excise business posting groupfrom the lookup list.

Excise Prod. Posting Group Choose the excise production postinggroup from the lookup list.

From Date Enter the date, from which you want tocalculate CVD and ADC.

CENVAT Cr. Receivable Account Choose the CENVAT Cr. Receivable Account from the lookup list.

CENVAT Cr. Receivable (Trading) Choose the CENVAT Cr. Receivable(Trading) from the lookup list.

CENVAT Transferred (Trading) Choose the CENVAT Transferred(Trading) from the lookup list.

Excise Payable Account Choose the Excise Payable Account fromthe lookup list.

CENVAT Cr. (Deferred) Account Choose the CENVAT Cr. (Deferred) Account from the lookup list.

BED Calculation Type Choose the BED Calculation type fromdrop down button.

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BED % Define the BED %.

BED Calculation Formula Define the BED calculation formula as thesum of BCD Amount, CIF Amount (Newfield introduced for the calculation of CVD).

AED(GSI) Calculation Type Choose the AED(GSI) Calculation Typefrom drop down button.

AED(GSI) % Define the AED(GSI) %.

AED(GSI) calculation formula Define the AED(GSI) calculation formulaas the sum of BCD Amount, CIF Amount.

SED Calculation type Choose the SED Calculation type fromdrop down button.

SED % Define the SED %

SED Calculation formula Define the SED calculation formula as thesum of BCD Amount, CIF Amount.

SAED calculation Type Choose the SAED Calculation type fromdrop down button.

SAED % Define the SAED %.

SAED calculation formula Define the SAED calculation formula asthe sum of BCD Amount, CIF Amount.

eCess calculation type Choose the eCess Calculation type fromdrop down button.

eCess % Define the eCess %.

eCess calculation formula Define the eCess calculation formula asthe sum of BED Amount, AED Amount,SED Amount and SAED Amount.

Setoff Available for eCess Place a check mark If you want to setoff against excise payable eCess and SHECESS.

SHE CESS calculation type Choose the SHE CESS Calculation typefrom drop down button. (New field hasbeen introduced to calculate SHE CESS).

SHE CESS % Define the SHE CESS % (New Field hasbeen introduced to calculate SHE CESS).

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SHE CESS calculation formula Define the SHE CESS calculation formulaas the sum of BED Amount, AED Amount,SED Amount and SAED Amount (NewField has been introduced to calculateSHE CESS).

ADC VAT calculation type Choose the ADC VAT Calculation typefrom drop down button. (New field hasbeen introduced for the calculation of

ADC).

ADC VAT % Enter the ADC VAT %(New field has beenintroduced for the calculation of ADC).

ADC VAT calculation formula Define the ADC VAT calculation formula asthe sum of BCD Amount, CIF Amount,BED Amount, AED Amount, SED Amount,SAED Amount, eCess Amount and SHECESS Amount (New field has beenintroduced for the calculation of ADC).

The program will calculate CVD and ADC, based on the formula defined in the ExcisePosting setup.

Claim Setoff

Navigation:Financial Management → General Ledger → Setup → Excise → Claim Setoff

In the Claim Setoff list, you can map a duty against another duty which you want to takethe credit while using CENVAT Claim form.

Fields Description:

Fields Description

BED Amount Choose duties from the duty code listagainst which you want to settle the BED

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Fields Description Amount.

AED(TTA) Amount Choose duties from the duty code listagainst which you want to settle the AED(TTA) Amount.

AED(GSI) Amount Choose duties from the duty code listagainst which you want to settle the AED(GSI) Amount.

ADET Amount Choose duties from the duty code listagainst which you want to settle the ADET

Amount.

ADE Amount Choose duties from the duty code listagainst which you want to settle the ADE

Amount.

CESS Amount Choose duties from the duty code listagainst which you want to settle the CESS

Amount.

NCCD Amount Choose duties from the duty code listagainst which you want to settle the NCCD

Amount.

SAED Amount Choose duties from the duty code listagainst which you want to settle the SAED

Amount.

SED Amount Choose duties from the duty code listagainst which you want to settle the SED

Amount.

eCESS Amount Choose duties from the duty code listagainst which you want to settle the eCess

Amount.

SHE CESS Amount Choose duties from the duty code listagainst which you want to settle the SHECESS Amount.

ADC VAT Amount Choose duties from the duty code listagainst which you want to settle the ADCVAT Amount.

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Structure

Navigation:

Financial Management → General Ledger → Setup → Structure → Structure

Create new structure for CVD calculation with Type “Excise”.

Fields Description

Fields Description

CVD Place a check mark in this field to calculatethe CVD.

CVD Payable to Third Party Place a check mark in this field if the CVDand ADC amount is payable to Third Partymeans Customs House.

CVD Third party Code Select the third party code from the G/L Account List by clicking lookup button.

Note: The program will calculate CVD only if the CVD is “True” in Structure and will

update third party account if CVD payable to third party field is checked and CVD thirdparty code is defined in structure.

Third party feature is only applicable in case of Purchase Transactions.

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Calculation of CVD and ADC through PurchaseTransactions

Calculation of CVD in case of Normal Item through Purchase Order/Invoice

Navigation: Purchases → Order Processing → Orders

To calculate CVD, fill the fields in the Purchase Order form as follows:

On the Header:

Buy from Vendor No : 10000 Structure: CVD

On the Line:

Type : Item No. : 1000 Description : Bicycle Quantity: 10 Direct Unit Cost: 1000 Line Amount: 10000 CIF Amount : 10000

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BCD Amount : 10000

Calculate Structure


Post the Order.


Navigation:Purchases → History → Posted Invoice

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G/L Entry


Particulars Type Amount(Rs)Purchase DR 10000CENVAT Cr.Receivable

DR 4228

Vendor CR 10000Custom House CR 4228

In this case, the program will credit the Custom House with CVD and ADC amount.

Calculation of CVD and ADC

The program will calculate the CVD and ADC based on the following information:

CIF + BCD Amount: 20000 CVD % (BED+AED+SED+SAED) : 16% ADC VAT %: 4% Ecess %: 2% SHE CESS %: 1%

Calculation:

20000*16%: 3200 (CVD)3200*2%: 64 (ECESS)3200*1%: 32 (SHE CESS)20000+3296 = 23296*4%: 932 (ADC VAT)Total CVD & ADC Amount: 3200+ 64+ 32+ 932= 4228

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Excise Entry

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The program will create Excise Entry with value in the CVD field as “Yes” and will alsoupdate the ADC VAT Amount.

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RG 23 A Part I

The program will create RG 23 A Part I entry with Received Quantity.

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RG 23 A Part II

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The program will create RG 23 A Part II entry with CVD “Yes” and will also update the ADC VAT Amount fields.

You can also post the transaction from the Purchase Invoice.

Note 1: The user can also calculate CVD for type G/L Account and Charge (Item) fromthe Purchase Order / Invoice.

Note 2: If CVD is “True” in Structure then the user should enter the amount in the CIFand BCD Amount fields on Purchase line of Order /Invoice.

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Note 3: ADC VAT amount will not be available for taking excise credit while makingpayment of service tax.

Calculation of CVD in case of Capital Item through Purchase

Order/Invoice Navigation: Purchases → Order Processing → Orders

To calculate CVD, fill the fields in the Purchase Order as follows:

On the Header:


On the Line:

Type : Item No. : 80206 (Capital Item field is true in Item Card) Description : WEBCAM Quantity: 10 Direct Unit Cost: 1000 Line Amount: 10000 CIF Amount : 10000 BCD Amount : 10000

Calculate Structure

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Post the Order



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G/L Entry


Particulars Type Amount(Rs)Purchase DR 10000CENVAT Cr.Receivable

DR 2580

CENVAT Deferred DR 1648Vendor CR 10000Custom House CR 4228

Note: In case of capital item the program will not consider ADC VAT amount asdeferred. ADC VAT amount will be treated as CENVAT Cr. Receivable.


The program will calculate the CVD and ADC based on the following information :


Calculation:


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4228-932=3296, 3296/2= 1648Means 1648 as CENVAT Deferred and 2580 as CENVAT Receivable

Excise Entries

First Entry

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The program will create the Excise Entry with ADC VAT amount while taking the value inthe CVD field as “Yes” and in the Deferred field as: “No”.

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Second Entry

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In the second entry you see that the Deferred field and the CVD field have the values as:“Yes” but there is no ADC VAT amount because ADC VAT amount is not considered as

deferred.

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RG 23 C Part II

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The program will create RG 23 C Part II entry with the value in the CVD field as: “Yes”and will update the ADC VAT Amount fields.


Note 1: The user can also calculate the CVD for type: Fixed Asset, G/L Account, andCharge (Item) from the Purchase Order / Invoice.

Note 2: If CVD is “True” in Structure then the user should enter the amounts in the CIFand BCD Amount fields on the purchase line of Order/Invoice.

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Calculation of CVD through purchase Credit Memo

Navigation: Purchases → Order Processing → Credit Memo

To calculate CVD, fill the fields in the Purchase Credit Memo window as follows:

On the Header:

No : 10000 Structure: CVD

On the Line:

Type : Item No. : 1000 Description : Bicycle Quantity: 10 Direct Unit Cost: 1000 Line Amount: 10000 CIF Amount : 10000

BCD Amount : 10000 Calculate Structure


Post the Credit Memo.

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Navigation:Purchases → History → Posted Credit Memos

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G/L Entry


Particulars Type Amount(Rs)Custom House Dr 4228Vendor Dr 10000CENVAT Cr.Receivable

Cr 4228

Purchase Cr 10000

In this case, the program will reverse the original transaction that has been created after posting the Purchase Order / Invoice.




Calculation:


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Excise Entry

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The program will create Excise Entry with the value in the CVD field as “Yes” and willupdate the ADC VAT Amount.

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RG 23 A Part I

The program will create RG 23 A Part I entry with negative value in the QuantityReceived field.

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RG 23 A Part II

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The program will create RG 23 A Part II entry with the value in the CVD field as “Yes”and will update the ADC VAT Debit field also.

You can also post the transaction from the Purchase Return Order. The program willonly create RG 23 A/C part I & II entries if the user has Return Order granule.

Note 1: The user can also calculate CVD for type: Fixed Asset, G/L Account and Charge(Item) from the Purchase Credit Memo/Return Order.

Note 2: If the CVD is “True” in Structure then the user should enter the amount in theCIF and BCD Amount fields on the purchase line of Credit Memo/Return Order.

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Calculation of CVD through Sales Order

Navigation:

Sales & marketing → Order Processing → Orders

To calculate CVD, fill the fields in the Sales Order window as follows:

On the Header:


On the Line:

Type : Item No. : 1000 Description : Bicycle Quantity: 10

Unit Price: 4000 Line Amount: 40000 CIF Amount : 10000 BCD Amount : 10000

Calculate Structure


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Navigation:

Sales & Marketing → History → Posted Invoice

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G/L Entry



The program will create the Credit Excise Payable entry with CVD and ADC VATamount.




Calculation:


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Excise Entry

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The program will create Excise Entry with value in the CVD field as “Yes” and will alsoupdate the ADC VAT Amount field.

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RG 23 A Part I

The program will create RG 23 A Part I entry with value in the Quantity Sold field.

In case of sales, the user can also enter the CVD (duties) and ADC VAT amountmanually in all duties fields on the sales line only after calculating Structure.

Note 1: The user can calculate CVD by selecting Type: Fixed Asset, G/L Account, andCharge (item) in the Sales Order/Invoice.

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Note 2: : If the CVD field is “True” in Structure then the user should enter the amount inthe CIF and BCD Amount fields on the sales line of Order/Invoice.

Note 3: The user can also calculate CVD through the Sales Credit Memo and ReturnOrder. In this case the program will update RG 23 A/C Part I & II entries with the value inthe CVD field as “Yes”.

Calculation of CVD through Transfer Order

Transfer of Normal Items

First purchase normal Items and calculate CVD and ADC VAT through the PurchaseOrder/Invoice. Then the transfer of normal items from one location to another occurs.


To calculate CVD, fill the fields in the transfer Order window as follows:

On the Header:

No : 1089 Transfer from Code : Loc 1.Transfer to Code : Loc 2.In-transit Code : Out. Log Structure: CVD

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On the Line:

Item No .: 1000 Description : Bicycle Quantity: 10 Transfer Price: 1000 Amount: 10000 CIF Amount : 10000 BCD Amount : 10000

Calculate Structure

Post the Transfer order Ship and Receive.

Viewing the Posted Transaction (Transfer Shipments)

Navigation:Warehouse → History → Posted Transfer Shipments

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Excise Entry

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The program will create Excise Entry with the value in the CVD field as “Yes” and willupdate the ADC VAT Amount field with the negative value.

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RG 23 A Part I


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Viewing the Posted Transaction (Transfer Receipts)

Navigation:Warehouse → History → Posted Transfer Receipts

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G/L Entry

The program will debit CENVAT Cr. Receivable account with CVD and ADC VATamount.



CIF + BCD Amount: 20000 CVD % (BED+AED+SED+SAED) : 16% ADC VAT %: 4% Ecess %: 2%

SHE CESS %: 1%

Calculation:


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Excise Entry

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RG 23 A Part I

The program will create RG 23 A Part I entry with value in the Quantity Received field.

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RG 23 A Part II

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The program will create RG 23 A Part II entry with the value in the CVD field as “Yes”and will update the ADC VAT Amount fields.

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Transfer of Capital Items

First purchase the capital items and calculate CVD and ADC VAT through the PurchaseOrder/Invoice. Then transfer of the capital items from one location to another occurs .



On the Header:

No : 1091Transfer from code : Loc 1Transfer to Code : Loc 2 In-transit Code : Out. Log Structure: CVD

On the Line:

Item No .: 80206 Description : Webcam Claim Deferred Excise : True Quantity: 10 Transfer Price: 1000 Amount: 10000 CIF Amount : 10000 BCD Amount : 10000

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Calculate Structure

Post the Transfer Order as Ship and Receive .



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G/L Entry

First the program will transfer the amount from the Deferred account to CENVAT Cr.Receivable account and then credit the Excise Payable account.

Calculation:

• In the original entry the program has debited CENVAT Cr. Receivable A/C with2580 and debited CENVAT Deferred A/C with 1648 as you have purchased acapital item.

• After transferring capital item from Loc 1. To Loc 2. The program has creditedCENVAT Deferred A/C with 1648 and debited CENVAT Cr. Receivable A/c with

1648.

• Now, CENVAT Cr. Receivable A/C in Loc 1 has a debit balance of 4228 and theprogram has credited Excise Payable A/C with 4228 after transferring capitalitems to Loc 2.

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Excise Entry

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The program will create Excise Entry with the value in the CVD field as “Yes” and willupdate the ADC VAT Amount field with negative value.

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RG 23 C Part I

The program will create RG 23 C part I entry with the value in the Quantity Sold field.

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RG 23 C Part II

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The program will create RG 23 C Part II entry and transfer the duties amount from nextyear to current year.

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G/L Entry

Note: The program will debit CENVAT Cr. Receivable and CENVAT Deferred account .

Note: In case of capital item, the program will not consider ADC VAT amount asDeferred. ADC VAT amount will be treated as CENVAT Cr. Receivable.



CIF + BCD Amount: 20000 CVD % (BED+AED+SED+SAED) : 16%

ADC VAT %: 4% Ecess %: 2% SHE CESS %: 1%

Calculation:


4228-932 = 3296, 3296/2= 16481648 as CENVAT Deferred and 2580 as CENVAT Receivable

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Excise Entry

First entry

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The program will create the Excise entry with ADC VAT amount while taking the value inthe CVD field as “Yes” and value in the Deferred field as “No”.

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Second entry

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In the second entry the value in both of the Deferred and CVD field is “Yes” but there isno ADC VAT Amount, because ADC VAT amount should not be consider as deferred.

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RG 23 C Part I

The program will create RG 23 C Part I entry with Quantity Received.

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RG 23 C Part II

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The program will create RG 23 C Part II entry with the value in the CVD field as “Yes”and will also update the ADC VAT Amount fields.

Note 1: If the CVD is “True” in Structure then user should enter the amounts in CIF andBCD Amount fields on the Transfer Order line.

Note 2: All transactions posted from Sales, Purchase and Transfer Order documentscan be viewed in RG 23 A/C Part II reports.

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Excise CENVAT Claim

In case of making adjustment of excise payable amount with CENVAT credit availablefor the particular ECC number.

Navigation: Financial Management → General Ledger → General journal

Click the Functions menu button, select the Payment option, and then click Excise.

A new window opens.

In the Pay Excise window, the program will show the pending transactions of saleswhich have to be paid.

Click Apply Entries.

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In this form all field except Service Tax are non-editable

Click Detail menu button to enter the values.

A new form opens, where you can take the credit or settle your excise payable accordingto the claim setoff list defined in the Excise Setup.

The program will show you the total liability according to the duty on each tab. The

program will also show you the credit available for each component on the top line.

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In the above form, you can see that for each duty the program is displaying liability andremaining liability. When you settle amount of duty with credit available then theremaining liability will be reduced to zero.

In the above form; you can see that for each duty, the program is displaying liability andremaining liability. When you settle amount of duty with credit available then theremaining liability will be reduced to zero.

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In the above form; you can see that for each duty, the program is displaying liability andremaining liability. When you settle amount of duty with credit available then theremaining liability will be reduced to zero .

In the above form; you see that three tabs are available for RG 23 A Part II, RG 23 CPart II, and PLA.

You can settle your components according to the setup.

After entering amounts on each tab, close the form.

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The program will automatically fill in the fields according to the values entered in theprevious form.

Close the form.

Now the program populates the Amount field with the total value that has been adjustedagainst CENVAT Credit.

Post the Journal.

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Note: As discussed above, the user can take the credit while using Direct Debit to PLAand creating Sales Order / Invoice. In this case only PLA tab is editable. In case of CVD,the user can adjust ADC VAT with any component of PLA based on the setup created inClaim Setoff list.

Calculation of CVD and ADC in case of Trading Items

Calculation of CVD in case of Trading Item through Purchase Order


To calculate CVD, fill the fields in the Purchase Order window as follows:

On the Header:

Buy from Vendor No : 10000 Location: Trading (Place a check mark in Trading Location Field in

the Location Card). Structure: CVD

On the Line:

Type : Item No. : 1000

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Description : Bicycle Quantity: 10 Direct Unit Cost: 1000 Line Amount: 10000 CIF Amount : 10000 BCD Amount : 10000

Calculate Structure


On the Invoicing tab, Trading Item field will get a default check mark if the Trading Co.field in the Company Information window has been checked.

Post the Order.



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G/L Entry


Particulars Type Amount(Rs)Purchase Dr 10000CENVAT cr.Receivable(Trading)

Dr 4228

Vendor Cr 10000Custom house Cr 4228

In this case the program will credit the Custom House with CVD and ADC Amount.

Calculation of CVD and ADCs



Calculation:


Excise Entry

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The program will create excise entry with the value in the CVD field as “Yes” and willalso update the ADC VAT Amount field.

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RG 23 D Entry

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The program will create RG 23 D entry with the value in the CVD field as “Yes” and willupdate the ADC VAT Amount Per Unit, Line Amount Per Unit, Excise Amount Per Unit

and Excise Base Amount Per Unit fields.


Note 1: If the CVD is “True” in Structure then the user should enter the amount in CIFand BCD Amount fields on the purchase line of Order / Invoice.

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Calculation of CVD in case of Trading Item through Sales Order

NAVIGATION :

Sales & Marketing → Order Processing → Orders

To create a sales order, fill the fields as follows:

Customer: 10000 Location: Blue Structure: Excise/CVD Item: 1000 Quantity: 10 Unit Price : 4000 Line Amount: 40000 (The program will calculate it.)


The program will calculate excise according to the defined setups.



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NAVIGATION :

Sales & Marketing → Order Processing → History → Posted Invoices

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G/L Entry


Particulars Type Amount(Rs)Customer Dr 44228CENVAT Transfer trading

Cr 4228

Sales Cr 40000

Following steps are needed to calculate excise amount on FIFO (First in First Out) basis:

Step 1: Purchase has been made for 10 quantities and the CVD amount is Rs. 4228

Step 2: While creating Sales Order, quantity is 10

Step 3: The Program will calculate the CVD amount on FIFO basis.

Step 4: From Purchase Order Rs. 4228 as CVD amount for 10 quantities have beentaken

Step 5: The value will come after calculating structure values.

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Excise Entry

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RG 23 D Entry

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The program will create RG 23 D entry with negative values.

Entry will be created against Purchase Order, where quantity is 10 and CVD amount is4228.

You can also post the transaction through Sales Invoice

Note 1: The CVD amount will be calculated through Structures. The program willcalculate the CVD amount on pro-rata basis where the Trading Item field has a checkmark in the Sales Order form and that will be displayed in RG 23 D.

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Note 2: The CVD amount will be calculated on FIFO basis for the item, purchasedthrough Purchase Order/Invoice.

Calculation of CVD in case of Trading Item through Purchase

Return Order

NAVIGATION :

Purchase → Order Processing → Return Orders


Vendor: 10000 Location: Trading Structure: CVD Applies-to Doc. Type: Invoice Applies-to Doc No: 108562 Item: 1000 Quantity: 10 Direct Unit Price : 1000 Line Amount: 10000 (The program will calculate it.)CIF Amount: 10000

BCD Amount: 10000


The program will calculate CVD according to the defined setups.


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NAVIGATION :

Purchase → Order Processing → History → Posted Credit Memos

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G/L Entry


Particulars Type Amount(Rs)Customs house Dr 4228Vendor Dr 10000CENVAT Cr.Receivable(Trading)

Cr 4228

Purchase Cr 10000

Note: In this case the program will reverse the original transaction which has beencreated at the time of posting the Purchase order.




Calculation:


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Excise Entry

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RG 23 D Entry

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The program will create RG 23 D entry with the value in the CVD field as “Yes”.

Note 1: In case of Purchase Return Order, all values in RG 23 D table will come innegative.

Note 2: It is mandatory to enter the document number in the Applies-to Doc. No fieldwhile creating Purchase Return Order.

Note 3: If the purchase is made and the user has also sold the quantity, after that theuser is doing purchase return with the program, then the program will not allow thisprocess. There should be some minimum quantity in RG 23 D for return.

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Calculation of CVD in case of Trading Item through Sales Return Order

NAVIGATION :

Sales & Marketing→

Order Processing→

Return Orders


Customer: 10000

Location: Trading Structure: CVD Applies-to Doc. Type: Invoice Applies-to Doc No: 107611 Item: 1000 Quantity: 10 Direct Unit Price : 4000 Line Amount: 40000 (The program will calculate it.)


The program will calculate CVD according to the defined setup.



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NAVIGATION :

Sales & Marketing → Order Processing → History → Posted Credit Memos

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G/L Entry


Particulars Type Amount(Rs)Sales Dr 40000CENVAT Transfer Trading

Dr 4228

Customer Cr 44228

The original sales invoice is posted with CVD amount as 4228. The sales invoice hasbeen applied and the program has taken the same CVD amount in the Return Order.




Calculation:


Excise Entry

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The program will create Excise entry with the value in the CVD field as “Yes” and willupdate the ADC VAT Amount field.

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RG 23 D Entry

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In the above window the Excise Amount Per Unit field has the value as: 422.8.

Note 1 : In case of Sales Return Order positive values will come in the RG 23 D table.

Note 2: It is mandatory to enter the document no. in Applies-to Doc field while creatingthe Sales Return Order.

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Goods Purchased for Trading and Further Transferredfor Manufacturing

Create a Purchase Order / Invoice with a check mark in the Trading Item field and thefollowing values:

Quantity: 10 Unit Cost: 1000 Line Amount: 10000 CIF Amount: 10000 BCD Amount: 10000 CVD Amount: 4228

Post the Order/Invoice.

The program will create the following entry:

Purchase A/C Dr. 10000CENVAT Cr. Rec. (Trading) Dr. 4228Vendor A/C Cr. 10000Customs House A/C Cr. 4228

The posted entry will store in the RG 23 D.

Transfer of Goods to Manufacturing Unit from Trading Unit

NAVIGATION :

Warehouse → Planning & Execution → Item Reclass. Journal

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Item No.: 1000 Location: Trading (Enter the trading location from where

goods have to be transferred)New Location: Manu fact (Enter the manufacturing location, to

which goods has to be transferred)Quantity: 10 Applies-to Entry (RG 23 D): 6

From Apples-to Entry (RG 23 D) lookup list, choose the entry number which you want totransfer.

Click Ok.

The selected entry number will be displayed in the Applies-to Entry (RG 23 D) field in theItem Reclass. Journal.


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Now the user can view the posted entries from the Posted Purchase Invoice.

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G/L Entry

The program will create the following entry.

Purchase A/C Dr. 10000Purchase (Trading) A/C Cr. 10000

Cenvat Cr. Receivable A/C Dr. 4228Cenvat Cr. Receivable (Trading) Cr. 4228

The purchase and the CVD amount will be transferred to the Manufacturing G/Laccounts from the Trading G/L account.

The program will create RG 23 D entry.

The program will reverse the original entry in RG 23 D table with negative values as theitem has been transferred to manufacturing unit with the value in the CVD field as “Yes”.

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Excise Entries

The program will also reverse the excise with negative values in trading location and inmanufacturing location. The program will create excise entry with positive values whiletaking the value in the CVD field as “Yes”.

The program will also create RG 23 A Part I & II entries in manufacturing location.

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RG 23 A Part I Entry


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RG 23 A Part II Entry

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The program will create RG 23 A Part II entry with the value in the CVD field as “Yes”and will also update the ADC VAT Amount field.

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Capital Goods Purchased for Trading and furtherTransferred for Manufacturing


Quantity: 10 Unit Cost: 1000 Line Amount: 10000 CIF Amount: 10000 BCD Amount: 10000 Excise Amount: 4228



Purchase A/C Dr. 10000CENVAT Cr. Rec. (Trading) Dr. 4228Vendor A/C Cr. 10000Customs house A/C Cr 4228


Transfer of Capital Goods to Manufacturing Unit from Trading Unit

NAVIGATION :Warehouse → Planning & Execution → Item Reclass. Journal


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Item No.: 80206 Location: Trading (Enter the trading location from where

goods have to be transferred)New Location: Manu fact (Enter the manufacturing location to

which goods has to be transferred)Quantity: 10 Applies-to Entry (RG 23 D): 8


Click OK.

The chosen entry number will be displayed in the Applies-to Entry (RG 23 D) field in theItem Reclass. Journal.


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Now the user can view the posted entries from the Posted Purchase Invoice

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G/L Entry


Purchase A/C Dr. 10000Purchase (Trading) A/C Cr. 10000Cenvat Cr. Receivable A/C Dr. 2580Cenvat Cr. Deffered Account Dr. 1648Cenvat Cr. Receivable (Trading) Cr. 4228

The program will divide the CVD amount as Capital item field is checked in the ItemCard.

The program will not consider ADC VAT amount in the Deferred account.

The purchase and the CVD amount will be transferred to the Manufacturing G/L accountfrom the Trading G/L account.


The program will reverse the original entry in the RG 23 D table with negative values asthe item has been transferred to manufacturing unit.

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Excise Entries

The program will reverse the excise entry in trading location with negative values andalso create two more entries in manufacturing location, one for non deferred with takingthe value in the CVD field as “Yes” and the second one for deferred with taking the valuein the CVD as “Yes”.

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RG 23 C Part I Entry

The program will create the RG 23 C Part I entry with value in the Quantity Receivedfield from manufacturing location.

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RG 23 C Part II Entry

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In manufacturing location, the program will create RG 23 C Part II entry with the value inthe CVD field as “Yes” and will also update the ADC VAT Amount field.

Note: All the transactions related to trading items, purchase, sales, and transfer of itemsfrom trading to manufacturing locations can be viewed in the RG 23 D and QuarterlyReturn for Trader’s reports.

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Appendix

Illustration:

Import of goods

• CIF: 10000 • BCD: 10000 • BED: 10% • AED: 2% • SED: 2% • SAED: 2% • ECESS: 2% • SHE CESS: 1% • ADC VAT: 4%

Calculation:

CIF + BCD = 20000


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Microsoft ® Business Solutions–Navision ® 4.0- Gate Entry

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Setups- Gate Entry ...............................................................................................4 Inventory Setup .................................................................................................6 Gate Entry Location Setup ................................................................................7

Gate Entry – Inward............................................................................................11 Gate Entry - Inward if the Source Type is Purchase Order .............................13

Viewing Posted gate Entry – Inward............................................................14 Get Gate Entry Lines ...................................................................................15

Gate Entry - Inward if the Source Type is Sales return Order .........................24 Viewing Posted Gate Entry – Inward ...........................................................25 Get Gate Entry Lines ...................................................................................26

Gate Entry - Inward if the Source Type is Transfer Receipt ............................31

Viewing Posted Gate Entry – Inward ...........................................................32 Get Gate Entry Lines ...................................................................................33

Gate Entry - Inward if the Source Type is Blank..............................................38 Create Gate Entry – Inward (In case of Purchase Invoice)..........................38 Viewing Posted Gate Entry – Inward ...........................................................39 Get Gate Entry Lines ...................................................................................40 Create Gate Entry – Inward (In case of Sales Credit Memo).......................45 Viewing Posted Gate Entry – Inward ...........................................................46 Get Gate Entry Lines ...................................................................................47 Create Gate Entry – Inward (In Case of Gifts and Others without ChallanNumber).......................................................................................................52

Viewing Posted Gate Entry – Inward ...........................................................53 Gate Entry – Outward .........................................................................................54

Gate Entry - Outward if the Source Type is Sales Shipment ...........................56 Viewing Posted Gate Entry – Outward ........................................................58

Gate Entry - Outward if the Source Type is Purchase Return Shipment .........60 Viewing Posted Gate Entry – Outward ........................................................62

Gate Entry - Outward if the Source Type is Transfer Shipment.......................64 Viewing Posted Gate Entry – Outward ........................................................66

Gate Entry - Outward if the Source Type is Blank ...........................................68 Viewing Posted Gate Entry – Outward ........................................................69

Reports ...............................................................................................................70

Gate Entry .......................................................................................................70 Posted Gate Entry...........................................................................................73 Gate Entry List.................................................................................................77 Posted Gate Entry List ....................................................................................78 Gate Entry – Inward Status .............................................................................79

Appendix.............................................................................................................81

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A process in any organization, used to keep track of entrance and exit of materials or other entities, to and from the organization’s premises, is termed as Gate Entry.

This functionality provides the facility to keep the record of the gate entries(Inward/Outward) of the goods and also helps in relating these entries with the PurchaseOrder / Sales Order / Return Order / Transfer Orders.

The Gate Entry system provides a physical control over the goods, which are themovable assets of the organization. Gate Entry also helps in audit trail.

Detailed Setup

Gate Entry functionality requires a detailed setup, which is used to maintain the number series based on location.

Setup Description

Inventory Setup Select the No Series for Inward GateEntries and Outward Gate Entries.

Gate Entry Location Setup Select the Posting No Series for thecombination of Entry Type and LocationCode.


The Gate Entry functionality covers the following points:

a) For Gate Entry Inward

• It provides the facility to create Gate Entry Inward against Purchase Order, SalesReturn Order and Transfer Receipt.

• It provides the facility to create Gate Entry Inward in case of samples, gifts andso on.

• It provides the facility to attach posted Gate Entry Inward with Purchase Order;Sales Return Order, Transfer Receipt, Purchase Invoice and Sales Credit Memo.

• It provides the facility to view the attached Gate Entry Inward.

b) For Gate Entry Outward

• It provides the facility to create Gate Entry Outward against Purchase ReturnOrder, Sales Order and Transfer Shipment

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• It provides the facility to create Gate Entry Outward in case of repairs, andothers.

• It provides the facility to attach Gate Entry Outward at the time of posting withPurchase Return Order, Sales Order, Transfer Shipment, Sales Invoice andPurchase Credit Memo.

• It provides the facility to view attached Gate Entry Outward.

Reports Following reports are provided to solve the needs of the Indian business scenarios:

• Gate Entry• Posted Gate Entry• Gate Entry List• Posted Gate Entry List

Setups- Gate Entry

Following are the functional areas where setup is required:• Inventory Setup• Gate Entry Location Setup

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Inventory Setup

Navigation:Warehouse → Setup → Inventory Setup

Fill in the fields on the Numbering tab, according to these guidelines:

Fields Description

Inward Gate Entry Nos. Select the number series for inward gateentry, from the lookup list.

Outward Gate Entry Nos. Select the number series for outward gateentry, from the lookup list.

By clicking the AssistButton in the Inward / Outward Gate Entry Nos. fields, No. Seriesform will be opened. You can select the number series for the inward and outward gateentry. When you create new inward and outward gate entry, the selected number serieswill show the number defined in the No. Series setup.

CP-PRTNR-1 is defined in the No. Series setup for Inward Gate Entry Nos. and CP-S-ORD-1 is defined for Outward Gate Entry Nos. as in the screen below.

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Gate Entry Location Setup

Navigation:Warehouse → Gate Entry → Setup → Gate Entry Location Setup

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Fields Description

Entry Type Choose the entry type from the drop downbox. The available options are: Inward andOutward.

Location Code Choose the location code from the lookuplist. You can assign No. Series for blanklocation code also.

Posted No. Series Choose the posted number series from thelookup list.

Choose the entry type as Inward and click the AssistButton to the right of the LocationCode field.

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Location List window opens in which you can choose the location.

After selecting location, click the AssistButton to the right of the Posting No. Series field.

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No. Series window opens, in which you can select the posted number series for theentry type.

In the above screen posted number series has been assigned for entry type: “Inward”and “Outward”. This is location specific.

Note: If the user is not using Location granule then he can assign the Posted No. Serieswith blank location code for the entry type: “Inward” or “Outward”. In the Gate Entry-Inward and Outward Card, the user has to keep the location code blank if he wants topost the documents with the number series assigned for blank location code in thesetup.

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Gate Entry – Inward

Navigation:Warehouse → Gate Entry → Gate Entry → Inward


On the Header

Fields Description

No. Number of Gate Entry- Inward will flowwhile pressing F3 to create new inwardand the number which you have defined inthe No. Series will flow in this field.


Station From Enter the station name from which goodsare coming to your factory/location.

Description Enter the description (For example: Goodsreceived from Vendor).

Item Description Enter item’s description, which you arereceiving.

Document Date Document date will automatically flow andit will be your system date. You can also

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Fields Descriptionchange the document date.

Document Time Document time will automatically flow andit will be your system time. You can alsochange the document time.

Posting Date Posting date will automatically flow and itwill be same as the document date. Youcan also change the posting date.

Posting Time Posting time will automatically flow and itwill be as same as the posting time. User can also change the Posting time.

LR/RR No.Enter the LR/RR number in this field.

LR/RR DateEnter the LR/RR date in this field.

Vehicle No. Enter the vehicle number, in which goodsare coming.

On the Line

Fields Description

Challan No. Enter the challan number received fromgoods

Challan Date Enter the challan date in this field.

Source Type Choose the source type from the dropdown box. Available options are: Blank,Sales Return Order, Purchase Order, andTransfer Receipt.It shows that against which document youare receiving goods and maintaining gateentry-inward.If the source type is blank, it means youare receiving the goods against PurchaseInvoice, Sales Credit Memo or some other type of goods like samples, gifts, and so onwhich are not based on any document.

Source No. Select the Source No. from the lookup listfor the selected source type. There is noneed to select the Source No. if the sourcetype is blank.

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Fields Description

Source Name This field shows the source namedepending on the source type you haveselected. If the source type is selected asSales Return Order then it will show thecustomer name. If the source type isselected as Purchase Order then it willshow the vendor name. If the source typeis Transfer Receipt then it will show thelocation name.

Description Enter the description in this field, if thesource type is blank.

Gate Entry - Inward if the Source Type is Purchase Order

Note: Please create the Purchase Order before creating Gate Entry – Inward.

Create Gate Entry – Inward

Enter the following information while making Gate Entry – Inward

On the Header

No. : Home-00012 Location Code : Blue Station from : New Delhi

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Description : Goods received from Vendor Item Description : 100 Bicycles Document Date : 20/01/07 Document Time : 10:28:35 AM Posting Date : 20/01/07 Posting Time : 10:28:35 AM LR/RR No. : A54123 LR/RR Date : 20/01/07 Vehicle No .: DL 9C P 8888

On the Line

Challan No. : 1201Challan Date : 20/01/07 Source Type : Purchase Order Source No .: 106030 Source name : Delhi Postmaster Description : P.O. Date 20/01/07

Post the Gate Entry – Inward

Viewing Posted gate Entry – Inward

Navigation:Warehouse → Gate Entry → History → Posted Gate Entry → Inward

In the posted Gate Entry – Inward window, the Status field on the line level has the valueas “Open”, it means gate entry – inward is still open for attachment with the purchaseorder no. 106030.

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You can view the list of posted Gate Entry – Inward by clicking Gate Entry menu buttonin the form and then by clicking the List.

You can also create multiple lines in Gate Entry – Inward with different source type.

Get Gate Entry Lines

Attach posted gate entry – inward with the purchase order you have created earlier andmentioned in the Source No. in Gate Entry – Inward .


To get gate entry lines, click Functions menu button and select Get gate Entry Linesmenu item in the Purchase Order window.

A new form will be opened where you can select the posted gate entry line you want toattach.

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Click OK.

After attaching gate entry with purchase order, click Order menu button in the PurchaseOrder window and select the Attached Gate Entry menu item to view the attached gateentry.

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A new form opens.

In this form you can view the attached gate entry line that you have attached earlier.

Post the Purchase Order.

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The user can also view the attached gate entry line from posted purchase receipt.

Navigation:Purchase → History → Posted Receipt

To view the attached gate entry line, click the Receipt menu button and select the Attached Gate Entry menu item

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A new form opens .

In this form you can view the attached gate entry with the purchase order.

After posting the purchase order, again view the posted gate entry – inward that youhave attached with the purchase order.

You can see in the above screen that Status field has value as Closed, after posting thepurchase order with gate entry – inward .

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The user can also get Gate Entry lines from Warehouse Receipts.

If the user has posted the purchase order with partial receipt, after posting purchaseorder and releasing it, this will be available for warehouse receipt.

Create Gate Entry - Inward

Enter the following information while making Gate entry – Inward

On the Header

No. : Home-00028 Location Code : Blue Station From : New Delhi Description : Warehouse receipt Item Description : Bicycles Document Date : 20/01/07 Document Time : 2:46:39 PM Posting Date : 20/01/07 Posting Time : 2:46:39 PM LR/RR No. : 7412 LR/RR Date : 20/01/07 Vehicle No .: DL 8P 9632

On the Line

Challan No. : 1001Challan Date : 20/01/07 Source Type : Purchase Order Source No .: 10009 Source name : Delhi Postmaster


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Warehouse Receipt

Navigation:Warehouse → Planning & Execution → Receipts

To get gate entry lines, click Functions menu button and select Get gate Entry Linesmenu item in the Warehouse Receipt window.

A new form opens in which you can select the posted gate entry line you want to attach.

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Click OK.

After attaching gate entry with warehouse receipt, click Receipt menu button and selectthe Attached Gate Entry menu item in the Warehouse Receipt window to view theattached gate entry.

A new form opens.

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Post the Receipts.

After posting the warehouse receipt, again view the posted gate entry – inward that youhave attached with the warehouse receipt .

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You can see in the above screen shot that Status is “Closed” now after posting thewarehouse receipt with gate entry – inward.

Gate Entry - Inward if the Source Type is Sales return Order

Note: Please create the Sales Return Order before creating Gate Entry – Inward.



On the Header:

No. : Home-00015 Location Code : Blue Station from : New Delhi Description : Sales Return from Customer Item Description : 10 Bicycles Document Date : 20/01/07 Document Time : 12:07:51 PM Posting Date : 20/01/07 Posting Time : 12:07:51 PM

LR/RR No. : 96542 LR/RR Date : 20/01/07 Vehicle No .: DL 7L 1234

On the Line:

Challan No. : 80 Challan Date : 20/01/07 Source Type : Sales return Order

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Source No .: 1005 Source name : The Canon Group PLC Description : return Order Date 20/01/07


Viewing Posted Gate Entry – Inward


In the Posted Gate Entry – Inward window the Status field on the line level has the valueas Open, it means gate entry – inward is still open for attachment with the sales returnorder no. 1005 .

The user can also view the list of posted Gate entry – inward by clicking Gate Entrymenu button in the form and click list.

You can also create multiple lines in Gate Entry – Inward with different source types.

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Attach posted gate entry – inward with the sales return order you have created earlier and mentioned in the source No. in gate entry – inward.

Navigation:Sales & Marketing → Order Processing → Return Orders

To get gate entry lines, click Functions menu button and select Get gate Entry Linesmenu item in the Sales Return Order.

A new form opens in which you can select the posted gate entry line, you want to attach.

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Click OK. After attaching gate entry with Sales Return Order, click Ret. Order menu button andselect the Attached Gate Entry menu item to view the attached gate entry in the SalesReturn Order .

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A new form opens.


Post the Sales Return Order.

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The user can also view the attached gate entry line from Posted Return Receipt

Navigation: Sales & Marketing → History → Posted Return Receipt

Click the Return Receipt menu button and select Attached Gate Entry menu item to viewthe attached gate entry line.

After clicking Attached Gate Entry, a new form opens.

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In this form, you can view the attached gate entry with return order.

After posting the Sales Return Order again you can view the posted gate entry – inwardthat you have attached with the sales return order.

You can see in the above screen that Status field has the value as Closed now; after posting the sales return order with gate entry – inward.

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Gate Entry - Inward if the Source Type is Transfer Receipt

Note: Please create the Transfer Order before creating gate Entry – Inward.



On the Header

No. : Home-00023

Location Code : Blue Station From : Mumbai Description : Received from Green Location Item Description : 50 Bicycles Document Date : 20/01/07 Document Time : 01:40:14 PM Posting Date : 20/01/07 Posting Time : 01:40:14 PM LR/RR No. : MH87452 LR/RR Date : 15/01/07 Vehicle No .: MH 8L 4125

On the Line

Challan No. : 2501Challan Date : 15/01/07 Source Type : Transfer Receipt Source No .: 1019 Source name : Green Warehouse Description : Dated 15/01/07 Post the Gate Entry – Inward

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Navigation:Warehouse → Gate Entry → History → Posted Gate Entry – Inward

In the posted Gate Entry – Inward window, the Status field on the line level has the value

as Open. It means gate entry – inward is still open for attachment with the transfer order no. 1019 .

The user can also view the list of posted Gate entry – inward by clicking Gate Entrymenu button in the form and click List.

You can also create multiple lines in Gate entry – inward with different Source Type.

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Attach posted gate entry – inward with the transfer order you have created earlier andmentioned in the source number in gate entry – inward.


To get gate entry lines, click Functions menu button and select Get gate Entry Linesmenu item in the Transfer Order window.


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Click OK.

After attaching gate entry with transfer order, click Order menu button and select the Attached Gate Entry menu item in the Transfer Order window to view the attached gateentry.

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A new form opens.


Post the Transfer Order as Receive. (First the user has to post the transfer order as Shipand after that he has to post the transfer order as Receive).

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You can also view the attached gate entry line from posted Return receipt

Navigation:Warehouse → History → Posted Transfer Receipt

Click the Receipt menu button and select Attached Gate Entry menu item to view theattached gate entry line.

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A new form opens.

In this form you can view the attached gate entry.

After posting the transfer order again view the posted gate entry – inward that you haveattached with the transfer order.

You can see in the above screen that Status field has the value as Close after postingthe transfer order with gate entry – inward.

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Gate Entry - Inward if the Source Type is Blank

Source type as Blank is applicable only if the goods are received against PurchaseInvoice or Sales Credit Memo. Otherwise any other goods/items, which are coming inyour premises against gifts, samples and so on without any documents .

Create Gate Entry – Inward (In case of Purchase Invoice)


On the Header

No. : Home-00029 Location Code : Blue Station from : New Delhi Description : Received from Vendor Item Description : Bicycle Document Date : 20/01/07 Document Time : 4:06:20 PM Posting Date : 20/01/07 Posting Time : 4:06:20 PM LR/RR No. : 85412 LR/RR Date : 20/01/07 Vehicle No .: DL 2C 1241

On the Line

Challan No. : 0006 Challan Date : 20/01/07 Source Type : Blank

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Source No .: Blank Source Name : Blank Description : Invoice to be Prepaired




In the Posted Gate Entry – Inward window, the Status field on the line level has thevalue as Open. It means gate entry – inward is still open for attachment with PurchaseInvoice.

The user can also view the list of posted gate entry – inward by clicking Gate Entrymenu button in the form and selecting the List.

You can also create multiple lines in Gate Entry – Inward with different source types.

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Attach posted gate entry with Purchase Invoice which is yet to be prepared.

Navigation:Purchase → Order Processing → Invoices

Create a Purchase Invoice.

To get gate entry lines, click Functions menu button and select Get gate Entry Lines inthe Purchase Invoice.


The program will show gate entry lines with source type as Blank.

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C lick OK. After attaching gate entry with purchase invoice, click Invoice menu button in thePurchase Invoice and select the Attached Gate Entry menu item to view the attachedgate entry.

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A new form opens.


Post the Purchase Invoice.

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You can also view the attached gate entry line from the Posted Receipt


Click the Receipt menu button and select the Attached Gate Entry menu item to view theattached gate entry line.

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A new form opens.


After posting the purchase invoice; again view the posted gate entry – inward that youhave attached with the purchase invoice.

You can see in the above screen that the Status field has the value as Closed, after posting the purchase invoice with gate entry – inward.

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Create Gate Entry – Inward (In case of Sales Credit Memo)


On the Header

No. : Home-00030 Location Code : Blue Station from : Mumbai Description : Received from Customer Item Description : Bicycle Document Date : 20/01/07 Document Time : 4:33:35 PM Posting Date : 20/01/07 Posting Time : 4:33:35 PM LR/RR No. : 63214 LR/RR Date : 16/01/07 Vehicle No .: MH 8P 7777

On the Line

Challan No. : 100 Challan Date : 16/01/07 Source Type : Blank Source No .: Blank Source name : Blank Description : Sales Credit Memo to be Prepared


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In the Posted Gate Entry – Inward window the Status field on the line level has the value

as Open. It means gate entry – inward is still open for attachment with Sales CreditMemo.

The user can also view the list of posted gate entry – inward by clicking Gate Entrymenu button and selecting List in the form.

You can also create multiple lines in gate entry – inward with different source types.

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Note: Attach posted gate entry with Sales Credit Memo which is yet to beprepared.

Navigation:Sales & Marketing → Order Processing → Credit Memos

Create a Purchase Invoice.

To get gate entry lines, click Functions menu button and select Get Gate Entry Lines inthe Credit Memo.


The program will show the gate entry lines with source type as Blank.

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Click OK.

After attaching gate entry with credit memo, click Credit Memo menu button and selectthe Attached Gate Entry in credit memo to view the attached gate entry.

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A new form opens .



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You can also view the attached gate entry line from Posted Receipt.


Click the Return Receipt menu button and select Attached Gate Entry menu item to viewthe attached gate entry line.

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A new form opens.


After posting the credit memo; again view the posted gate entry – inward that you haveattached with the credit memo .

You can see in the above screen that the Status field has the value as Close, after posting the credit memo with gate entry – inward.

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Create Gate Entry – Inward (In Case of Gifts and Others withoutChallan Number)


On the Header:

No. : Home-00031 Location Code : Blue Station from : New Delhi Description : Gifts

Item Description : Gift of CEO Document Date : 20/01/07 Document Time : 4:51:17 PM Posting Date : 20/01/07 Posting Time : 4:51:17 PM LR/RR No. : Blank LR/RR Date : Blank Vehicle No .: DL 9J 1234

On the Line

Challan No. : Blank Challan Date : Blank Source Type : Blank Source No .: Blank Source name : Blank Description : Gift for CEO from Bank


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In the posted Gate Entry – Inward window the Status field on the line level has the value

as Open. Since there is no document for which this gate entry has been made and it willnot further attached with any other document the status will remain “Open” for this gateentry.

The user can also view the list of posted gate entry – inward by clicking Gate Entrymenu button and click List in the form.

You can also create multiple lines in gate entry – inward with different source types.

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Gate Entry – Outward

Navigation:Warehouse → Gate Entry → Gate Entry → Outward


On the Header

Fields Description

No. Number which you have defined in the No.Series will flow in this field. while pressingF3 in case of creating new gate entryoutward


Station To Enter the station name, to which goods aredispatching from your factory / location.

Description Enter general description in this field (For example: Goods delivered to customer).

Item Description Enter item’s description, which you aredispatching.

Document Date By default the document date will be your system date. You can also change the

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Fields Descriptiondocument date.

Document Time By default the document time will be your system time. You can also change thedocument time.

Posting Date The program automatically shows thedocument date in this field. You can alsochange the posting date.

Posting Time Posting time will automatically flow and itwill be as same as the document time. Youcan also change the posting time.

LR/RR No. Enter the Lorry Receipt / Railway Receiptnumber in this field.

LR/RR Date Enter the Lorry Receipt / Railway Receiptdate in this field.

Vehicle No. Enter the vehicle number or carrier number in this field.

On the Line

Fields Description

Challan No. Enter the challan number issued for dispatching goods from your factory.

Challan Date Enter the challan date in this field.

Source Type Choose the source type from the dropdown box. Available options are: Blank,Sales Shipment, Purchase ReturnShipment, and Transfer Shipment.

Source Type specifies about the documentagainst which you are dispatching goodsand maintaining Gate Entry- Outward.

If the Source Type field is blank, it meansyou are dispatching goods for some other purposes like repairing and so on, whichare not based on any documents.

Source No. Select the source number from the lookuplist for the selected source type. There is

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Fields Descriptionno need to select the Source No. field if thesource type is blank.

Source Name This field shows the source namedepending on the source type you haveselected. If the source type is selected asSales Shipment then it will show thecustomer name. If the source type isselected as Purchase Return Shipmentthen it will show the vendor name. If thesource type is Transfer Shipment then itwill show the location name.

Description Enter the description in this field, if thesource type is blank.

Gate Entry - Outward if the Source Type is Sales Shipment

Note: Please create and post the Sales Order / Invoice before creating GateEntry – Outward .

Create Gate Entry – Outward

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Enter the following information while making Gate Entry – Outward

On the Header

No. : Home-00005 Location Code : Blue Station to : Mumbai Description : Sale of Goods Item Description : 10 Bicycles Document Date : 07/02/07 Document Time : 03:05:53 PM Posting Date : 07/02/07 Posting Time : 03:05:53 PM LR/RR No. : 987654 LR/RR Date : 07/02/07 Vehicle No .: DL 2C B 1234

On the Line

Challan No. : 3001Challan Date : 07/02/07 Source Type : Sales Shipment Source No .: 102050 Source name : The Cannon Group PLC Description : against sales shipment

Post the Gate Entry – Outward

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Viewing Posted Gate Entry – Outward

Navigation:Warehouse → Gate Entry → History → Posted Gate Entry → Outward

The program will post the gate entry-outward with detailed information. The program willautomatically attach the Gate Entry-Outward with the source number you have entered.

You can view the list of posted Gate Entry – Outward by clicking the List menu item onthe Gate Entry menu button.

You can create multiple lines in Gate Entry – Outward with different source type.

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You can also view the attached gate entry line from the Posted Sales Shipment form.

NAVIGATION :Sales & Marketing → History → Posted Shipment

To view the attached gate entry line, click the Shipment menu button and select the Attached Gate Entry menu item

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A new form opens.

In this form you can view the attached gate entry with the Sales Shipment.

Gate Entry - Outward if the Source Type is Purchase Return Shipment

Note: Please create and post the Purchase Return Order before creating GateEntry – Outward.


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On the Header

No. : Home-00006 Location Code : Blue Station to : New Delhi Description : Goods Returned Item Description : 5 Bicycles Document Date : 07/02/07 Document Time : 03:26:30 PM Posting Date : 07/02/07 Posting Time : 03:26:30 PM LR/RR No. : 777 LR/RR Date : 07/02/07 Vehicle No .: DL 2C V 1111

On the Line

Challan No. : 3002 Challan Date : 07/02/07 Source Type : Purchase Return Shipment Source No .: 105012 Source name : Delhi Postmaster Description : against purchase return order


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The program will post the Gate Entry-Outward detailed information. The program willautomatically attach the Gate Entry-Outward with the source number you have entered.


You can create multiple lines in Gate Entry – Outward with different source type.

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You can also view the attached gate entry line from the Posted Return Shipment form.

Navigation:Purchase → History → Posted Return Shipment

To view the attached gate entry line, click the Attached Gate Entry menu item on theReturn Shipment menu button.

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A new form opens .

In this form you can view the attached gate entry with the Purchase Return Shipment.

Gate Entry - Outward if the Source Type is Transfer Shipment

Note: Please create and post the Transfer Order before creating Gate Entry –Outward.


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On the Header

No. : Home-00007 Location Code : Blue Station to : New Delhi Description : Transfer Item Description : 5 SYDNEY Swivel Chair, green Document Date : 07/02/07 Document Time : 03:47:29 PM Posting Date : 07/02/07 Posting Time : 03:47:29 PM LR/RR No. : 888 LR/RR Date : 07/02/07 Vehicle No .: DL 2N D 2222 On the Line

On the Line

Challan No. : 3003 Challan Date : 07/02/07 Source Type : Transfer Shipment Source No .: 108007 Source name : Green warehouse Description : Transfer shipment


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The program will post the gate entry-outward detailed information. The program willautomatically attach the gate entry-outward with the source number you have enteredafter the posting.


You can also create multiple lines in Gate Entry – Outward window with different sourcetypes.

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You can also view the attached gate entry line from the Posted Transfer Shipment form.

Navigation:Warehouse → History → Posted Transfer Shipment

To view the attached gate entry line, click the Shipment menu button and select the Attached Gate Entry menu item

A new form opens .

In this form you can view the attached gate entry with the Transfer Shipment.

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Gate Entry - Outward if the Source Type is Blank

Note: Create Gate Entry – Outward in case, some goods are dispatching fromyour factory premises for repairing without source document type.



On the Header

No. : Home-00008 Location Code : Blue Station to : Bby Description : Repair Item Description : 10 Bicycles Document Date : 07/02/07 Document Time : 04:03:45 PM Posting Date : 07/02/07 Posting Time : 04:03:45 PM

On the Line

Challan No. : 5555 Challan Date : 07/02/07 Source Type : Blank Source No .: Blank Source name : Blank Description : goods dispatching for repairing.


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The program will post the gate entry – outward. In this case program will not attach thisgate entry with any source document type.

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Reports

Navigation:Warehouse → Gate Entry → Reports

Gate Entry

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Navigation:Warehouse → Gate Entry → Report → Gate Entry

This report will show you the details of unposted Gate Entry – Inward/Outward.

Enter the following information in the filter options:

On the Gate Entry Header tab:

Fields Description

Entry Type Select the entry type for which you want togenerate report. The available options are:Blank, Inward and Outward.

If you want to generate the report for entrytype inward then select Inward. If you wantto generate report for entry type outwardthen select Outward and if you want togenerate report for both then keep it blank.

No. Enter the number of gate entry for whichyou want to generate the report.

Location code Select the location code for which youwant to generate the report.

Document Date Enter the document date.

Click Preview button to generate the report.

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Posted Gate Entry

Navigation:Warehouse → Gate Entry → Report → Posted Gate Entry

This report will show you the details of posted Gate Entry – Inward/Outward.


Posted Gate Entry Header tab:

Fields Description



No. Enter the number of gate entry for whichyou want to generate the report.


Posting Date Enter the posting date

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Posted Gate Entry Line tab:

Fields Description

Source Type Select the source type for which you wantto generate report. The available optionsare: Sales Shipment, Sales Return Order,Purchase Order, Purchase ReturnShipment, Transfer Shipment and Transfer receipt.

Status Select the status for which you want togenerate the report. The available optionsare: Blank, Open and Close.


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Gate Entry List

Navigation:Warehouse → Gate Entry → Report → Gate Entry List

This report will show you the list of unposted Gate Entry – Inward/Outward.


On the Gate Entry Header tab:

Fields Description



Location code Select the location code for which you


Document Date Enter the document date.


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Posted Gate Entry List

Navigation:Warehouse → Gate Entry → Report → Posted Gate Entry List

This report will show you the list of posted Gate Entry – Inward/Outward.


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On the Posted Gate Entry Header tab:

Fields Description




Posting Date Enter the posting date


Gate Entry – Inward Status

Navigation:

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Warehouse → Gate Entry → Report → Gate Entry – Inward Status

This report will show the status of Inward gate entries that has been attached or notattached with Source Type.


On Options tab:

Fields Description

Source Type Select the source type from drop downbutton for which you want to generate

report. The options available are Blank,Return Order, Purchase Order andTransfer receipt. If you select blank optionthen system will generate the report for allsource type.



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Appendix

Case 1 (Gate Entry Inward)

100 bicycles have been received from the vendor in the factory premises with challannumber 5001 against the purchase order.

Now you are required to make the entry on the gate before entering the goods into thefactory premises.

Solution:

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Create a new Gate Entry Inward and enter the detailed information like:

On the Header

No. : Home-0001 Location Code : Blue Station from : New Delhi Description : Goods received from Vendor Item Description : 100 Bicycles Document Date : 20/01/07 Document Time : 10:28:35 AM Posting Date : 20/01/07 Posting Time : 10:28:35 AM LR/RR No. : A54123 LR/RR Date : 20/01/07 Vehicle No .: DL 9C P 8888

On the Line

Challan No. : 5001Challan Date : 20/01/07 Source Type : Purchase Order Source No .: 106030 Source name : Delhi Postmaster Description : P.O. Date 20/01/07

After that you can attach the posted gate entry inward with the purchase order.

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Case 2 (Gate Entry Outward)

100 bicycles have been sold to the customer and goods are dispatching out from your factory premises with challan number 1001 against the sales order.

Now you are required to make the entry on the gate before dispatching the goods outfrom your factory premises.

Solution:

Create a new Gate Entry Outward and enter the detailed information like:

On the Header

No. : Home-0001 Location Code : Blue Station from : New Delhi Description : Goods received from Vendor Item Description : 100 Bicycles Document Date : 20/01/07 Document Time : 10:28:35 AM Posting Date : 20/01/07 Posting Time : 10:28:35 AM LR/RR No. : 52141 LR/RR Date : 20/01/07 Vehicle No .: DL 7C J 7777

On the Line

Challan No. : 1001

Challan Date : 20/01/07 Source Type : Sales Order Source No .: 106030 Source name : Canon Group Description : S.O. Date 20/01/07

The program will automatically attach the gate entry outward with sales order after posting.

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Microsoft® Business Solutions–Navision® 4.0- Service Tax on Advance

Payment

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Table of Contents

Overview...............................................................................................................3Detailed Setup...................................................................................................3Comprehensive Functionality ............................................................................3Service Tax on Advance Payment ....................................................................3

Set-up for Service Tax Functionality .....................................................................4Service Tax Accounts in Chart of Accounts ......................................................4Service Tax .......................................................................................................5Service Tax Groups...........................................................................................6Service Tax Set Up ...........................................................................................7Service Tax Registration No. .............................................................................8Company Information........................................................................................8

Mapping of GL Accounts .................................................................................10 Add Service Tax Component in the Structure Card.........................................11Transactions of Advance Payment .....................................................................11

Advance Payment made to Vendor.................................................................11History - Service Tax on Advance Payment made to Vendor .....................14

Purchase Transactions....................................................................................15Direct Invoices using Purchase Order.........................................................16History - Advance Payment applied in Purchase Order ..............................18

Advance Payment received from Customer ....................................................25History - Service Tax on Advance Payment received from Customer.........28

Sales Transactions..........................................................................................29Direct Invoices using Sales Order...............................................................29History - Advance Payment applied in Sales Order ....................................31

Refund of Advance Payment...........................................................................37Reports ...............................................................................................................42

Service Tax on Advance Payment ..................................................................42 Appendix.............................................................................................................44

Accounting of Service Tax on Advance Payment............................................44

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Overview

The Service Tax on Advance payment functionality calculates and updates the servicetax records, which is required in India for service tax liability and credit availability on

advance payments/ receipts.

Detailed Setup

You use the following setups to prepare Service Tax on Advance Payment functionality.

Setup Area DescriptionChart of Accounts Service tax accounts are defined here

Service Tax Setup Service group code and service tax registrationnumber are created here

Service Tax Rate Rates of service tax are to be defined in the TaxSetup

Structure Structure to be created based on service tax

G/L Mapping Service input account and service output accountsare to be mapped with the service tax group


The focus of this functionality to enable calculation of Service Tax on Advance Paymentreceived from the customer and advance payment made to the vendor. This functionalityis applicable when you provide a checkmark on Serv. Tax on Advance Payment filedwith other information like Service tax Group code and Service Tax Registration No.When you create invoice and apply the advance payment, Dynamics NAV will calculatethe service tax considering the advance payment amount and the service tax amountinvolved in it, so that the service tax liability and the service tax credit amount remainaccurate.

Report

Service Tax on Advance Payment

This report shows the details of advance payment received or made according to thecheckmark provided on Serv. Tax on Advance Payment field while creating journals. Inthis report you can find if the advance payment received or made has been appliedagainst invoices or not.

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Set-up for Service Tax Functionality

Service Tax Accounts in Chart of Accounts

Create the Service Tax G/L Accounts which are compulsory for the Service Tax Setup:

Navigation:General Ledger → Chart of Accounts

Types of Service Tax G/L Account you need to create for the Service Tax Setup are:

Service Tax Payable Account : All service tax liability on output service sales will betransferred to this account from the interim account, after passing a payment fromcustomer that has been applied against the sales invoice.

Service Tax Receivable Account: All input service tax credit on purchases ultimatelywill be transferred to this account from the interim account, after passing a payment tovendor and applying the same against the purchase invoice.

Service Tax Payable Interim Account: All sales related service tax entries are postedin this account for the service tax amount charged temporarily. The amount getstransferred to the Service Tax Payable account after passing a payment entry which hasbeen applied against the particular sales invoice.

Service Tax Receivable Interim Account: Service Tax Receivable Interim account is acontrol account, which gets recorded on posting of an invoice and gets knocked off atthe time of passing of a payment that applied against the vendor purchase invoice

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Service Tax

Navigation:General Ledger → Setup → Service Tax

You can create the Service Tax setup for both of Excise as Service Credit and ServiceTax as Excise Credit.

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Service Tax Groups

Navigation:General Ledger → Setup → Service Tax → Tax Group

Service Tax Group defines the nature of services for which service tax are applicable.

Define service tax groups according to your business scenario or services. For example:Banking and finance services, Advertisement services, Job work, and so on.


Field DescriptionCode Define the service tax group code.

Description Describe the name of the service tax group.

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Service Tax Set Up

Navigation:General Ledger → Setup → Service Tax → Tax Setup


Field Description

Code Choose the service tax group from the drop down list.

From date Specify the effective date from which the service taxrate becomes applicable.

Percentage Specify the service tax rate percentage applicable for the service tax group.

Percentage (eCess) Specify the education cess rate applicable for theservice tax group

Percentage (SHE eCess) Specify the secondary and higher education cess rateapplicable for the service tax group

Service Tax Receivable Account

Choose the Service Tax Receivable account, where aninput credit is recorded.

Service Tax Payable Account Choose the Service Tax Payable account.

Receivable Account (Interim) Choose the Service Tax receivable account (Interim).

Payable Account (Interim) Choose the Service Tax Payable account (Interim).

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Service Tax Registration No.

Navigation:General Ledger → Setup → Service Tax → Tax Registration No.


Field DescriptionService Tax Registration No. Define the various service tax registration

no. as per location from where you provide

services.

Company Information

According to the business scenario, specify a registration number either in the CompanyInformation or in the Location Card. Specify service tax registration number in theCompany Information if centralized billing is applied, or specify registration number in theLocation Card if decentralized billing and multi-location environment are applied.

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Attach a service tax registration number on the Others tab of the Company Information.

Navigation: Administration → Application Setup → Warehouse → Locations

Note:

By default the program takes the registration number attached in the CompanyInformation card in all transaction screens if location field is left blank. If the billing

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location is specified then the program will take the service tax registration number of therespective location.

Mapping of GL Accounts

In the GL Account card, different accounts are created for various types of services.Relevant service tax groups are to be attached with the specific G/L accounts on thePosting tab.



Field DescriptionService Tax Group Code Select the relevant service tax group for

the GL account.

Note:

As there is a one to one mapping between the services group and GL accounts, youneed to create as many GL accounts for each of the services. For example: If you areproviding chartered accountant services and also providing financial services, then you

need to create two GL accounts, to cater to both the services.

Even when availing services, you need to create as many GL accounts in your purchases so that each service should be mapped.

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Add Service Tax Component in the Structure Card

Navigation:General Ledger → Setup → Structure → Structure

Include Service Tax in the structure card, as done for taxes like Excise and Sales Tax.

Transactions of Advance Payment

Advance Payment made to Vendor


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In case of Service Tax on Advance Payment, the following fields are mandatory:

Field DescriptionDocument Type You should specify the Document Type as Payment while

recording advance payment.Serv. Tax on

Advance Payment

You should provide a check mark on this field while making

advance payment. The program enables the service taxcalculation functionally based on this check mark.

Service Tax GroupCode

Select the service tax group code in this field. According to theservice tax group code the percentage of service tax andeCess will be captured to calculate the service tax on advancepayment.

Service TaxRegistration No.

Specify a service tax registration number here. You shouldrefer the service tax registration number to enable the programto maintain service tax record according to the service taxregistration number.

E.C.C. No. Select the E.C.C No. in this filed. You should provide the

E.C.C. number if you want to utilize service tax as excise creditagainst discharging excise liability.

Enter the following information in the General Journal:

Document Type Payment Document No. Program will assign number from number

series setup Serv. Tax on Advance Payment Please a check mark on this field Account Type Vendor Account No. Select the vendor code from the list Service Tax Group Code ADV

Service Tax Registration No. HXJ118910111357 Bal. Account No. Select Cash/Bank account

While making an advance payment to vendors through the General Journal, you shouldmark Serv. Tax on Advance Payment to allow the program to calculate service tax onthe advance payment made. You also require mentioning service tax group code andservice tax registration number in the general journal.

Note:

You should not apply the advance payment with any other document. Program willgenerate an error message and will not post the document if you use application

functionality on this document.Press CTRL+F8 to see the detail calculation of service tax on the advance payment onthis transaction.

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In the above screen, the calculation of service tax on advance payment is displayed. Theentry will be reflected in the Service Tax Entry table, so that service tax credit getsrecorded to the extent of the advance payment made to vendor.

Post the general journal.

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History - Service Tax on Advance Payment made to Vendor


Select the Service Tax Entry line and then click Show to view the service tax details.

Select the G/L Entry line and then click Show to view the accounting affect of theadvance payment made to vendor.

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The above payment entry has made the following GL entry in the program:

Description Dr/Cr AmountVendor Account Dr 11030.00Bank/Cash Account Cr 11030.00

Note: In case of advance payment made to vendor with the checkmark on Serv. Tax on Advance Payment, Dynamics NAV will not create any GL entry for Service TaxReceivable Interim Account or Service Tax Receivable Account. But Service Tax Entrytable will be updated to keep track of advance payment made to vendor..

You also could use the following templates to create payments to vendor where service

tax on advance payment could be calculated.

a) Payment Journalb) Cash Payment Voucher c) Bank Payment Voucher

Purchase Transactions

The advance payment made to the vendor could be applied to the purchase invoice toenable the program to update the service tax table. In normal business scenario therecould be two examples of advance payment made, 100 % payment made in advance or partial advance made against an input service. In the following examples both thescenario will be discussed

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Direct Invoices using Purchase Order

Navigation:Purchases → Order Processing → Order

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Enter the following details on the Purchase Order header:

Buy-from Vendor No Choose a vendor from the list. Location Code Keep this field blank Structure Select structure denoting Service Tax

Enter the following details on the Purchase Order line:

Type G/L account No. Select input service G/L Account which is mapped

with Service Tax Group Quantity 1 Direct Unit Cost Excl. VAT 10000 Service Tax Registration No. The program will capture the service tax

registration number from the Company Information as you kept the Location field blank. If Location is specified, the program will capture the service tax registration number from the Location Card.

Enter the following details on the Purchase Order Application Tab:

Field Description

Applies-to Doc. Type You should select the Payment type here.

Applies-to Doc. No. Select the appropriate advance payment made to the vendor that has been posted with the mark on Serv. Tax on AdvancePayment.

Note:

1. In the above purchase order form, since the General Ledger is already mappedto a Service Tax Group, the program will calculate the service tax amount.However the service tax computation will happen only after attaching astructure, with service tax component.

2. Program will validate the service tax group code and service tax registrationnumber entered in the purchase order with the payment document applied. If the service tax group code or service tax registration number of advancepayment document is different than the purchase order, program will not allowyou to post the purchase order and will generate error message.

3. At the time of posting the invoice, program will consider the amount of servicetax on advance payment document. If the program finds the applied paymentdocument which has been posted with a mark on Serv. Tax on AdvancePayment, will then calculate the service tax, service tax eCess and service taxSHE eCess amount based on the service tax, service tax eCess and service taxSHE eCess amount involved in the applied advance payment.

Click Functions → Calculate Structure Values

Post the purchase order

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History - Advance Payment applied in Purchase Order

The posted information of purchase invoice where advance payment is applied would bestored in service tax entry tables.

Navigation:Purchases → History → Posted Invoices

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Click Navigate to view the details of the entry that have been posted.

In the above window you can see that there is no service tax entry. The program alreadymade a service tax entry while the advance payment made to vendor with a checkmarkon Serv. Tax on Advance Payment. At the time of posting the above purchase documentyou have applied with similar nature of advance payment document If the invoiceamount is lesser than or equal to the advance payment document amount, the programwill not generate any service tax entry, but will create a GL entry as mentioned below:

Select the G/L Entry line in the Navigate form and then click Show to view the G/L entry.Program will display the following General Ledger details:

Description Dr/Cr Amount Advertisement Account Dr 10000.00Service Tax Receivable Account Dr 1030.00Vendor Domestic Account Cr 11030.00

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The program calculates the Service Tax as per the setup below :

Service Tax %: 10 Service Tax Base: 10,000 Service Tax Amount 1,000 Service Tax eCess %: 2 Service Tax eCess Amount: 20 Service Tax SHE eCess %: 1 Service Tax SHE eCess Amount: 10 Amount To Vendor: 11,030

Now take up the scenario where the invoice amount is greater than the advance payment made the program will calculate the service tax on the remaining amount of advance payment made.

Create another Advance Payment to Vendor according to the example below.Navigate to General Journal.



series setup Serv. Tax on Advance Payment Please a check mark on this field Account Type Vendor Account No. Select the vendor code from the list Service Tax Group Code ADV Service Tax Registration No. HXJ118910111357 Amount 11,030 Bal. Account Type GL Account Bal. Account No. Select Cash/Bank account

Post the advance payment document.

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Select the Service Tax Entry line in the Navigate form and then click Show to view theservice tax entry.

Select the G/L Entry line in the Navigate form and then click Show to view the G/L entry

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Program will display the following General Ledger details:

Description Dr/Cr Amount Advertisement Account Dr 20000.00Service Tax Receivable Interim Account Dr 1030.00Service Tax Receivable Account Dr 1030.00Vendor Domestic Account Cr 22060.00

The program calculates the Service Tax as per the setup :


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Advance Payment received from Customer Navigation:Financial Management → General Ledger → General Journal

In case of Service Tax on Advance Payment the following fields are important

Field DescriptionServ. Tax onAdvance Payment

You should provide a mark on this field. The program enablesthe service tax calculation functionally based on this checkmark.

Service Tax GroupCode

Select the service tax group code in this field. According to theservice tax group code the percentage of service tax andeCess will be captured to calculate the service tax on advancepayment.



E.C.C. No. Select the E.C.C No. in this filed. You should provide theE.C.C. number if you want to utilize service tax as excise creditagainst discharging excise liability.

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series setup Serv. Tax on Advance Payment Please a check mark on this field Account Type Customer Account No. Select the customer code from the list Service Tax Group Code ADV Service Tax Registration No. HXJ118910111357 Bal. Account No. Select Cash/Bank account

While creating an advance payment from customer using the General Journal, youshould mark Serv. Tax on Advance Payment to allow the program to calculate servicetax on the advance payment made. You are also required to mention service tax groupcode and service tax registration number in the general journal.

Note:

You should not apply the advance payment with any other document. Program willgenerate an error message and will not post the document if you use applicationfunctionality on this document.

Press CTRL+F8 to see the detail calculation of service tax on the advance payment onthis transaction.

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The above window is displaying the calculation of service tax on advance payment. Theentry will be reflected in the Service Tax Entry table, so that service tax liability getsrecorded to the extent of the advance payment received from customer.


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History - Service Tax on Advance Payment received from Customer


Select the Service Tax Entry line and then click Show to view the service tax details.

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Select the G/L Entry line and then click Show to view the accounting affect of theadvance payment received from customer.


Description Dr/Cr AmountBank/Cash Account Dr 11030.00Customers Domestic Account Cr 11030.00Service Tax Payable Account Cr 1030.00Service Tax Payable Interim Account Dr 1030.00

You also could use the following templates to create payments from customer whereservice tax on advance payment could be calculated.

a) Cash Receipt Journalb) Cash Receipt Voucher c) Bank Receipt Voucher

Sales Transactions

The advance payment received from the customer could be applied to the sales invoiceto enable the program to update the service tax table. In normal business scenario therecould be two examples of advance received, 100 % advance received or partial advancereceived against a service deal. In the following examples both the scenario will bediscussed.

Direct Invoices using Sales Order

Navigation:Sales & Marketing → Order Processing → Order

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Enter the following details on the Sales Order header:

Sell-to Customer No Choose a customer from the list. Location Code Keep this field blank Structure Select structure denoting Service Tax

Enter the following details on the Sales Order line:


with Service Tax Group Quantity 1 Unit Price Excl. VAT 50000 Service Tax Registration No. The program will capture the service tax


Enter the following details on the Sales Order Invoice Tab:

Field DescriptionApplies-to Doc. Type You should select the Payment type here.

Applies-to Doc. No. Select the appropriate advance payment received from thecustomer that has been posted with the mark on Serv. Tax on

Advance Payment.

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Note:

1. In the above sales order form, since the General Ledger is already mapped to aService Tax Group, the program will calculate the service tax amount. However the service tax computation will happen only after attaching a structure, withservice tax component.

2. Program will validate the service tax group code and service tax registrationnumber entered in the sales order with the advance payment receiveddocument applied. If the service tax group code or service tax registrationnumber of advance payment document is different than the sales order,program will not allow you to post the sales order and will generate error message.

3. At the time of posting the invoice, program will consider the amount of servicetax on advance payment. If the program finds the applied payment documentwhich has been posted with a mark on Serv. Tax on Advance Payment, willthen calculate the service tax and service tax eCess amount based on theservice tax and service tax eCess amount involved in the applied advancepayment.


Post the sales order

History - Advance Payment applied in Sales Order

The posted information of purchase invoice where advance payment is applied would bestored in service tax entry tables.

When you click on the Navigate button in the posted invoice entries, you will find that theprogram has made an entry in the Service Tax Entry Table.

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Navigation:Sales & Marketing → History → Posted Invoices

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In the above window you can see that there is no service tax entry. The program alreadyrecorded a service tax entry with the advance payment document, which has beenapplied to this sales order. If the invoice amount is lesser than or equal to the advancepayment made, the program will not generate any service tax entry .

Select the G/L Entry line in the Navigate form and then click Show to view the G/L entry.Program will display the following General Ledger details:

Description Dr/Cr AmountCustomers Domestic Account Dr 11,030.00Service Tax Payable Interim Account Cr 1,030.00

Advertisement Account Cr 10,000.00


Service Tax %: 10 Service Tax Base: 10,000 Service Tax Amount 1,000 Service Tax eCess %: 2 Service Tax eCess Amount: 20 Service Tax SHE eCess %: 1 Service Tax SHE eCess Amount: 10

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Now take up the scenario where the invoice amount is greater than the advance payment received the program will calculate the service tax on the remaining amount of advance payment made.

Create another Advance Payment received from Customer according to the example below.

Navigate to General Journal.



series setup Serv. Tax on Advance Payment Please a check mark on this field Account Type Customer Account No. Select the customer code from the list Service Tax Group Code ADV Service Tax Registration No. HXJ118910111357 Amount -22 ,060 Bal. Account Type GL Account Bal. Account No. Select Cash/Bank account

Post the advance payment document.

Create sales invoice using Sales Order form according to the example given below and apply the advance payment that you have posted assuming you have received a payment of 50 % advance.

Navigate to Sales Order.


Sell-to Customer No Choose a customer from whom you have received the advance payment.

Location Code Keep this field blank Structure Select structure denoting Service Tax



with Service Tax Group Quantity 1 Unit Price Excl. VAT 40000 Service Tax Registration No. The program will capture the service tax

registration number from the Company Information as you kept the Location field blank. If Location is

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specified, the program will capture the service tax registration number from the Location Card.

Enter the following details on the Purchase Order Invoice Tab:

Field DescriptionApplies-to Doc. Type You should select the Payment type here.

Applies-to Doc. No. Select the appropriate advance payment made to the vendor that has been posted with the mark on Serv. Tax on AdvancePayment.


Post the purchase invoice

See the posted information of the sales entry made to understand how the program ismanaging the Service Tax on Advance payment where the invoice amount is greater than the advance payment received.


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Select the Service Tax Entry line in the Navigate form and then click Show to view the

service tax entry.


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Description Dr/Cr AmountCustomers Domestic Account Dr 44120.00Service Tax Payable Interim Account Cr 4120.00

Advertisement Account Cr 40000.00


Service Tax %: 10 Service Tax Base: 40,000 Service Tax Amount 4,000 Service Tax eCess %: 2 Service Tax eCess Amount: 80 Service Tax SHE eCess %: 1 Service Tax SHE eCess Amount: 40

Refund of Advance Payment

There could be a business scenario where you need to refund the entire or partialamount you have received or paid as advance payment. In that case the service taxamount calculated and stored, when advance payment made or received in the servicetax register, must be reversed accordingly.

You will see how Dynamics NAV manages the scenario, say, you have received anadvance payment from you customer. Create the advance payment as per the followingexample.

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series setup, say G00333 Serv. Tax on Advance Payment Please a checkmark on this field Account Type Customer Account No. Select the customer code from the list Service Tax Group Code ADV Service Tax Registration No. HXJ118910111357 Amount -11,030.00 Bal. Account No. Select Cash/Bank account


The program has created service tax entry details; your service tax liability is increasedaccordingly after this advance payment has been posted. Suppose there is a disputeand you need to refund the entire amount to the customer, then you also need to reduceyour service tax liability accordingly.


In case of creating a refund against Service Tax on Advance Payment, the followingfields are mandatory:

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Field DescriptionServ. Tax onAdvance Payment

You should provide a checkmark on this field. The programenables the service tax calculation functionally based on thischeckmark.

Service Tax GroupCode Select the service tax group code in this field. According to theservice tax group code the percentage of service tax andeCess will be captured to calculate the service tax on therefund amount.




Document Type Refund

Document No. Program will assign number from number series setup, say G00068 Serv. Tax on Advance Payment Please a checkmark on this field Account Type Customer Account No. Select the customer code from the list Service Tax Group Code ADV Service Tax Registration No. HXJ118910111357 Amount 11,030.00 Bal. Account No. Select Cash/Bank account Applies-to Doc. Type Payment Applies-to Doc. No. G00333

Post the refund Document.

View the posted information of Refund that you have posted recently.

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Select the Service Tax Entry line in the Navigate form and then click Show to view theService Tax Entry.

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Here all the entry has been reversed in terms of the advance payment received from thecustomer:

Description Dr/Cr AmountCustomers Domestic Account Dr 11,030.00Service Tax Payable Account Dr 1,030.00Service Tax Payable Interim Account Cr 1,030.00Bank/Cash Account Cr 11,030.00

Now, if you compare the GL entry of the advance payment received from customer thatyou have posted recently, the GL entry will be as below.

Description Dr/Cr AmountBank/Cash Account Dr 11,030.00Service Tax Payable Interim Account Dr 1,030.00Service Tax Payable Account Cr 1,030.00Customers Domestic Account Cr 11,030.00

The above mentioned example was for full refund against the advance paymentreceived. Dynamics NAV can also manage the scenario where the partial amount isrefunded. You will have to follow the same procedure of refunding against the advancepayment received, but the amount will be less the advance payment received.

In case of refund to vendor against the advance payment made, Dynamics NAV willallow you to use the functionality as above.

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Reports

Service Tax on Advance Payment Navigation:Financial Management → General Ledger → Report → Service Tax Reporting→ Service Tax on Advance Payment

Enter the following information in the Report Request form:

Field DescriptionCustomer/Vendor Choose an option from dropdown list as Customer or Vendor.Customer Code Select Customer from the list for which you want to generate the

reportVendor Cose Select Vendor from the list for which you want to generate the reportStarting Date Enter date (from which date the report to be generated)Ending Date Enter date (to which date the report to be generated)

The program will generate the report as below:

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The above report displays following key information:

Amount: Amount denotes the advance payment received from the customer. Applied Amount: Applied Amount denotes the amount applied against any document.Remaining Amount: Remaining Amount denotes the balance amount after application.

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AppendixAccounting of Service Tax on Advance Payment

XYZ Ltd. enters into a quarterly agreement on 01/04/2006 with ABC Ltd to provide Legalconsulting service. It was decided that XYZ Ltd. will raise an invoice of INR 2, 00,000after rendering of services. On 15/04/2006 ABC Ltd. pays INR.50, 000 for advanceagainst services. XYZ Ltd. starts rendering consulting on 15/05//2006. The rate of service tax is 10% and e-Cess rate is 2%.

(a) The following financial entry will appear in the books of service provider at thetime of posting of payment Journal for advance.

Account DR CRBank (Advance against Service) 50,000Customer 50,000Interim Service tax Payable 6,000Interim E-Cess on Service tax payable 120Service tax Payable 6,000E-Cess on Service Tax payable 120

(b) At the time of invoice of services, the entry would be as follows:

Account DR CRCustomer 2,24,480Sales service (Consulting) 2,00,000Interim Service tax Payable 24000Interim E-Cess on Service tax payable 480

(c) At the time of receipt of balance payment, the financial entry will appear as

follows:

Account DR CRBank 1,50,000Customer 1,50,000Interim Service tax Payable 18,000Interim E-Cess on Service tax payable 360Service tax Payable 18,000E-Cess on Service Tax payable 360

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Microsoft® Business Solutions–Navision® 4.0- Excise as Service Tax

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Table of Contents

Overview:........................................................................................................................... 4

Detailed Setup: ................................................................................................................. 4

Comprehensive Functionality: ........................................................................................ 5

Input Service Details .................................................................................................... 5

Set-up for Service Tax Functionality ............................................................................. 5

Service Tax Accounts in Chart of Accounts: ............................................................ 5

Service Tax ................................................................................................................... 6

Service Tax Groups ..................................................................................................... 7

Service Tax Set Up: ..................................................................................................... 8

Service Tax Registration No.: .................................................................................... 9

Company Information: ............................................................................................... 10

Mapping of GL Accounts: .......................................................................................... 11

Add Service Tax component in the Structure Card: ............................................. 12

Transactions of Input Service and Output Service ................................................... 12

Purchase Transactions .............................................................................................. 13

Direct Invoices using Purchase Invoices ........................................................... 13

Service Tax Entry History – Purchase Invoice ................................................. 15

The above purchase entries have affected the following GL account: ......... 17

Payments using Payment Journal ...................................................................... 17

Service Tax Entry History – Payment ................................................................ 18

Sales Transactions .................................................................................................... 20

Direct Invoices using Sales Invoices .................................................................. 20

Service Tax Entry History - Sales Invoice......................................................... 22

Payments using Receipt Journal ........................................................................ 24

Service Tax Entry History - Receipt ................................................................... 25

Excise as Service Tax Credit ....................................................................................... 27

Implication for the Service Provider ........................................................................ 27

Purchase Order ..................................................................................................... 27

Periodical Activities for managing Excise as Service Tax Credit and Service Tax Payment ............................................................................................................... 33

Excise as Service Tax Credit: ............................................................................. 33

Payment of Service Tax and Excise as Service Tax Credit: ............................... 34

Service Tax as Excise ................................................................................................... 41

Implication for the Manufacturers ............................................................................ 41

Purchase Order ..................................................................................................... 42

Periodical Activities for managing Service Tax as Excise Credit and Excise Duty Payment ............................................................................................................. 43

Service Tax as Excise Credit: ............................................................................. 43

Payment of Excise Duty and Service Tax as Excise Credit: ............................... 45

Update Challan Details .................................................................................................. 50

Reports ............................................................................................................................. 50

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Input Service Details .................................................................................................. 50

Appendix .......................................................................................................................... 52

Accounting of Service Tax ........................................................................................ 52

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Overview: Earlier service tax incurred on input service was allowed as credit, which might beutilized for the payment of service tax on output service. The service tax credit can only

be utilized for payment of output service tax. Total service tax credit available as on thelast date of the month can be used to discharge the service tax liability of the month. Incase of individual or partnership firm assesees, the service tax credit as on the last dateof the quarter can be utilized to discharge the service tax liability of the quarter.

Presently the concern providing the output service using inputs (goods) and inputservices can avail the credit of the excise duty paid on the inputs and service tax paid onthe services to discharge the service tax liability. Similarly the manufacturing concerncan take credit on the service tax paid on the input services which are used for manufacturing and can use the service tax credit to discharge the excise liability.

Detailed Setup:

You use the following setups to incorporate Excise as Service Tax Credit and ServiceTax as Excise Credit functionality in your organization.

Setup Area DescriptionChart of Accounts Service tax accounts are defined here.

Service Tax Setup Service group code and service tax registrationnumber are to be created here

Service Tax Rate Rates of service tax are to be defined in the TaxSetup.

Structure Structure to be created based on service tax.

G/L Mapping Service input account and service output accountsare to be mapped with the service tax group

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Comprehensive Functionality: The focus of this functionality is to utilize the availed Excise as Service Tax Credit andService Tax as Excise Credit. This functionality is completely optional and it includes:

• Setup for both Service Tax as Excise and Excise as Service Tax will be done inthe Periodical Activity application area.

• Provision for selecting the excise entries or service tax entries to facilitate the useof the availed credits in discharging the excise or service tax liability based on thesetup.

Report

Input Service Details This report shows the details of Credit Availed and Credit Utilised. The service tax creditopening, credit taken, credit utilized, and closing balance show the amount you haveavailed and utilized either for Service Tax as Excise Credit while paying excise duty or for credit utilized against the payment of service tax. This report also shows the balanceof credit availed amount.

Set-up for Service Tax Functionality

Service Tax Accounts in Chart of Accounts:

Create the Service Tax G/L accounts which are compulsory for the Service Tax Setup:


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Types of Service Tax G/L account you need to create for the Service Tax Setup are:

Service Tax Payable Account : All service tax liability on output service sales will betransferred to this account from the interim account, after passing a payment fromcustomer that has been applied against the sales invoice.

Service Tax Receivable Account: All input service tax credit on purchases ultimatelywill be transferred to this account from the interim account, after passing a payment tovendor and applying the same against the purchase invoice.

Service Tax Payable Interim Account: All sales related service tax entries are posted

in this account for the service tax amount charged temporarily. The amount getstransferred to the Service Tax Payable account after passing a payment entry which hasbeen applied against the particular sales invoice.

Service Tax Receivable Interim Account: Service Tax Receivable Interim account is acontrol account, which gets recorded on posting of an invoice and gets knocked off atthe time of passing of a payment that applied against the vendor purchase invoice

Service Tax

Navigation:General Ledger → Setup → Service Tax

You can create the Service Tax setup for both of Excise as Service Credit and ServiceTax as Excise Credit.

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Service Tax Groups

Navigation:General Ledger → Setup → Service Tax → Tax Group

Service Tax Group defines the nature of services for which service tax are applicable.

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Define service tax groups according to your business scenario or services. For example:Banking and finance services, Advertisement services, Job work, and so on.


Field DescriptionCode: Define the service tax group code.

Description: Describe the name of the service tax group.

Service Tax Set Up:

Navigation:General Ledger → Setup → Service Tax → Tax Setup

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Field Description

Code Choose the service tax group from the drop down list.

From date Specify the effective date from which the service taxrate becomes applicable.

Percentage Specify the service tax rate percentage applicable for the service tax group.

Percentage (eCess) Specify the education cess rate applicable for theservice tax group

Percentage (SHE eCess) Specify the secondary and higher education cess rateapplicable for the service tax group

Service Tax Receivable Account Choose the Service Tax Receivable account, where aninput credit is recorded.

Service Tax Payable Account Choose the Service Tax Payable account.

Receivable Account (Interim) Choose the Service Tax receivable account (Interim).

Payable Account (Interim) Choose the Service Tax Payable account (Interim).

Service Tax Registration No.:

Navigation:General Ledger → Setup → Service Tax → Tax Registration No.

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Field DescriptionService Tax Registration No. Define the various service tax registration

no. as per location from where you provideservices.

Company Information:

According to your business scenario, specify registration number either in the CompanyInformation or in the Location Card. You can specify service tax registration number in

the Company Information if centralized billing is applied or specify registration number inthe Location Card if decentralized billing and multi-location environment are applied.


Attach a service tax registration number on the Others tab of the Company Information.

Navigation: Administration → Application Setup → Warehouse → Locations

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Note: By default the program takes the registration number attached in the CompanyInformation card in all transaction screens if location field is left blank. If the billinglocation is specified then the program will take the service tax registration number of therespective location.

Mapping of GL Accounts:

Mapping of GL Accounts to Service Tax Groups: In the GL Account card differentaccounts are created for various types of services. Relevant service tax groups are to be

attached with the specific G/L accounts on the Posting tab.


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Field DescriptionService Tax Group Code: Select the relevant service tax group for

the GL account.

Note: As there is a one to one mapping between the services group and GL accounts,you need to create as many GL accounts for each of the services. For example: If youare providing chartered accountant services and also providing financial services, thenyou need to create two GL accounts, to cater to both the services.

Even when availing services, you need to create as many GL accounts in your purchases so that each service should be mapped.

Add Service Tax component in the Structure Card:

Navigation:General Ledger → Setup → Structure → Structure

Include Service Tax in the structure card, as done for taxes like Excise and Sales Tax.

Transactions of Input Service and Output Service

In this section, you can understand how the program stores the service (purchase /sales) related entries, Service Tax Credit Availed, and Service Tax Liability

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In this section, you can also understand how the Service Tax Interim accounts areaffected through different transactions.


Direct Invoices using Purchase Invoices


Enter the following details on the Purchase invoice/order header:

Buy-from Vendor No Choose a vendor from the list. Location Code Keep this field blank Structure Select structure denoting Service Tax

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Enter the following details on the Purchase invoice line:


with Service Tax Group Quantity 1 Direct Unit Cost Excl. VAT 100000 Service Tax Registration No. The program will capture the service tax


(In the above window, since the GL account 8410 is already mapped to a Service TaxGroup, the program will calculate the service tax amount. However the service taxcomputation will happen only after attaching a structure, with service tax component.)


To view the computed Service Tax details press F9 (Statistics).

Post the purchase invoice

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Service Tax Entry History – Purchase Invoice

Service Tax Entry Table stores all the purchase invoices involved in the service tax. Itstores the posted invoice number and the posting date along with the service tax detailslike: service tax group, service tax registration number, service tax amount, and so on.

When you click on the Navigate button in the posted invoice entries, you will find that theprogram has also made an entry in the Service Tax Entry table.

Navigation:Purchases → History → Posted Invoices


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Select the Service Tax Entry line and then click Show to view the service tax entry.

Select the G/L Entry line in the Navigate form and then click Show to view the G/L entry.

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The above purchase entries have affected the following GL account:

Description Dr/Cr Amount Advertisement Account Dr 100000.00Service Tax Receivable Interim Account Dr 10300.00Vendor Domestic Account Cr 110300.00

Calculation of Service Tax as per the structure below :


Payments using Payment Journal

Navigation:Financial Management → Payables → Payment Journal

Note: While making payments using General Journal/Payment Journal, please ensurethat the Document Type is selected as ‘Payment’, otherwise the service tax credit willnot be updated.

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Enter the following information in the Payment Journal:

Document Type Payment Document No. Number will be generated automatically Account Type Vendor Account No. Select the vendor code from the list Bal. Account No. Select Cash/Bank account Applies-to Doc. Type Invoice Applies-to Doc. No. Select the invoice for which you are making

payment

While making payments to vendors through the Payment Journal, apply the entry withthe relevant invoice. The entries are reflected in the Service Tax Entry table, so thatservice tax credit gets recorded to the extent of the payment made.

Service Tax Entry History – Payment

Navigation:Purchases → History → Navigate

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Select the G/L Entry line and then click Show to view the G/L Entry.

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Description Dr/Cr AmountVendor Account Dr 110300.00Service Tax Receivable Account Dr 10300.00Service Tax Receivable Interim Account Cr 10300.00Bank/Cash Account Cr 110300.00

In the above table, you will find that amount is transferred from the Service TaxReceivable Interim account to the Service Tax Receivable Account and is available for utilize against the service tax liability.

Sales Transactions

Direct Invoices using Sales Invoices

Navigation:Sales & Marketing → Order Processing → Invoices

Enter the following details in the Sales Invoice header:

Sell-to Customer No. Choose a customer from the list. Location Code Keep this field blank Structure Select structure denoting Service Tax

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Enter the following details in the Sales Invoice line:

Type G/L account No. Select output service G/L Account which is mapped

with Service Tax Group Quantity 1 Unit Price Excl. Vat 200000 Service Tax Registration No. The program will capture the service tax

registration number from the Company Information as you have kept the Location field blank. If Location is specified, the program will capture the service tax registration number from the Location Card.

In the above window, since the GL account ‘8410-Advertising’ is already mapped to aService Tax Group; the service tax will be calculated. However the service taxcomputation will happen only after attaching a structure with service tax component.

Click Functions → Calculate Structure Values To view the computed details press F9 (Statistics).

Post the Sales Invoice.

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Service Tax Entry History - Sales Invoice

Service Tax Entry table stores all the sales invoices including service tax. It stores theposted invoice number and the posting date along with the service tax details like:service tax group, service tax registration number, service tax amount, and so on.

If you click the Navigate button in the posted invoice entries, you will find that theprogram has also made an entry in the Service Tax entry table.


Click Navigate to view the details of entries that have been posted.

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Select the Service Tax Entry line and then click Show to view the Service Tax entry.

Select the G/L Entry line and then click Show to view the GL entry.

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The above window displays the following accounts:

Description Dr/Cr AmountCustomer Account Dr 220600.00Service Tax Payable Interim Account Cr 20600.00

Advertising Cr 200000.00

Calculation of service tax as per the structure below:

Service Tax %: 10 Service Tax Base: 200,000 Service Tax Amount 20,000

Service Tax eCess %: 2 Service Tax eCess Amount: 400 Service Tax SHE eCess %: 1 Service Tax SHE eCess Amount: 200 Amount To Customer: 220,600

Payments using Receipt Journal

Navigation:Financial Management → Receivables → Receipt Journal

Note: While recording incoming payments using the Receipt Journal/General Journal,please ensure that the Document Type is selected as ‘Payment’, otherwise the servicetax liability will not be updated to the extent of payment received.

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Enter the following information:

Document Type Payment Document No. Document number will be generated automatically Account Type Customer Account No. Choose the customer code from the list Bal. Account No . Choose Cash /Bank account Applies-to Doc. Type Invoice Applies-to Doc. No. Choose the invoice, for which you are receiving

payment

Note: While receiving payments from customers through the Receipt Journal/General

Journal, apply the entry with the relevant invoice. The entries are reflected in the ServiceTax Entry table, so that service tax liability gets recorded only to the extent of thepayment received.

Service Tax Entry History - Receipt

If you see the posted document of the original invoice, you will find that the service taxentry is updated and the amount of payment received is reflected in the table.

Navigation:Sales & Marketing → History → Navigate

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Select the G/L Entry line and then click Show to view the GL entry.

The above payment entry has made the following GL entry in the program

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Description Dr/Cr AmountCash/Bank Account Dr 220600.00Service Tax Payable Interim Account Dr 20600.00

Service Tax Payable Account Cr 20600.00Customer Account Cr 220600.00

In the above table, you will find that amount is transferred from the Service Tax PayableInterim account to the Service Tax Payable account and standing as the service taxliability.

Excise as Service Tax Credit

Implication for the Service Provider

If the service provider is purchasing any excisable goods and using the material toprovide the service, then the service provider can utilize the excise credit against thepaying off the service tax.

For example: CRONUS India Limited an advertisement agency has signed up anagreement to provide advertisement service to its client. The company bought a plotter from the vendor ‘Delhi Postmaster’ for printing signboard. The excise duty paid by thecompany could be utilize as Excise as Service Tax Credit while paying off service tax.

The purchase order entry will be made as follows:

Purchase Order

Navigation:Purchases → Order Processing → Purchase Order

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Enter the below mentioned information and post the Purchase order.

Buy-from Vendor No. Choose a vendor from the list. Location Code Keep this field blank Structure Select structure denoting EXCISE

Enter the following details on the Purchase Invoice line:

Type Item No. Select the capital item you have defined in

the program (In the item card will mark the Capital Item field to specify an item as capital goods).

Quantity 1Direct Unit Cost Excl. VAT 260000

Calculate Structure Values from Functions and press F9 (Statistics) to see thePurchase Invoice Statistics:

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Press F11 to post the Order as Receive and Invoice

Excise Entry History - Purchase Invoice


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Note: The computation of excise duty will be based on the excise setup. In case of Capital Item, 50 percent of excise duty paid on purchase could be utilized as CENVATCredit in the current year and rest will be carry forwarded to the next year. You can alsobook excise credit by creating purchase invoice while buying input or capital goods to

use for the output services.

Click Navigate to see the entry details:

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Click Show to view the Excise entry:

As the type of bought item is ‘Capital’, the program will make two entries, which couldassure the 50 percent credit for the current year and rest for the next year.

To see the G/L effect, select the G/L Entry line and click Show in the Navigate window:

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The program has made the following G/L Entry:

Description Dr/Cr Amount

Purch., Raw Materials - Dom. Dr 200400.00Cenvat Cr. Receivable Account Dr 11200.00Cenvat Cr. Deffered Account Dr 11200.00Vendors, Domestic Cr 222800.00

The Structure has made the following calculation for the Excise entry:

Excise Base Amount: 200,000 BED % : 10 Capital Item: Yes

AED(GSI) %: 2 SED % : 2

SAED %: 2 eCess %: 2 SHE Cess %: 2

AED(TTA) %: 2 ADE %: 2 BED Amount: 20,000

AED(GSI) Amount: 400 SED Amount: 400 SAED Amount: 400 eCess Amount: 400 SHE Cess Amount: 400

AED (TTA) Amount: 400

ADE Amount: 400 Excise Amount: 22,800 Amount Including Excise: 222,800 Amount To Vendor: 222,800

Capital goods and any inputs purchased by a service provider are used for providingoutput service. The excise duty thus paid on purchasing the capital goods or inputs by

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the service provider, can be availed as a credit and can be offset against the service taxpayable.

Periodical Activities for managing Excise as Service Tax Credit and Service Tax Payment

The user can take decision on the amount of Excise Credit to utilize as Excise asService Tax Credit. This periodical activity will help the user to select the records of excise entries, which are to be carried out to take the credit against service tax liabilitybased on Register Type as: RG and Location as: E.C.C. No.

Excise as Service Tax Credit:

Navigation:Financial Management → General Ledger → Periodic Activities → Service Tax→ Excise as Service Tax Credit


Field Description

RG Register Type Choose the RG register type from the dropdown box. Available options are: RG 23Aand RG 23C.

Location E.C.C. No Choose the location from where youprovide service and credit to be forwardedas Excise as Service Tax credit.

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Click OK to see all records of the respective RG registers.

Select the entry or entries and provide a check mark for which you want to carry out theavailed credit.

Click OK

(Note: Beside the selection of RG 23A Part II or RG 23C Part II based on your decisionto carry out the credit, you can also filter the records based on the Excise BusinessPosting Group, Excise Product Posting Group, Posting Date, and so on as per your requirement.)

You use Function → Select All, to select all the records or may use UnCheck All toremove check mark from the records.

Remember that if you utilized the availed excise credit against Payment of ServiceTax as Excise as Service Tax Credit, those document which are fully applied withthe amount you utilized will be removed from this form by the program. Only thepartial document if any will be lying in this form and will display the availed creditin form of Remaining BED, Remaining SED, Remaining eCess, Remaining SHEeCess and so on. This could be use for future setoff of Service Tax Payment.

The cumulative excise credit amount (RG23A and RG23C) of selected records are nowavailable in the Service Tax Payment form.

Payment of Service Tax and Excise as Service Tax Credit: In this section, you can understand how does the program help you to pay Service Taxand how can you utilize the Excise as Service Tax.

Navigation:Financial Management → General Ledger → Periodic Activities → Service Tax

→ Payment

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Payment of Service Tax can be done through the Periodic Activities in General Ledger Module. In the Service Tax Payment window, you need to filter the details:

• Service Tax Regn No.: Choose the service tax registration number for the billinglocation, for which payment is to be made.

• Date Filter: Choose the date for which payment is to be made. You can enter from date and to date according to the business need.

• Document No: Enter the document number of the Service Tax Paymentdocument.

• Posting Date: Specify the date on which the payment should be recorded in theprogram.

• Location E.C.C. No.: Set a filter on the location ECC number to allow theprogram to calculate the CENVAT credit available as per location.

You can see the sales related service tax entries for the specified filters in the abovewindow.


Now you will see the screen below:

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Field DescriptionCredit Available RG23A Define the input credit available on the

RG23A register.

Credit Available RG23C Define the input credit available on the

RG23C register.

Credit Available RG23A eCess Define the input credit eCess available onthe RG23A register.

Credit Available RG23A SHE eCess Define the input credit SHE eCessavailable on the RG23A register.

Credit Available RG23C eCess Define the input credit eCess available onthe RG23C register

Credit Available RG23C SHE eCess Define the input credit SHE eCessavailable on the RG23C register

Credit Available Define the input credit on the value of services availed from vendors as well asthe sum of input credit according to RG23Aand RG23C on the Excise as Service TaxCredit line.

Credit Available eCess Define the input credit (eCess) on thevalue of services availed from vendors aswell as the sum of input credit (eCess)according to RG23A and RG23C on theExcise as Service Tax Credit line.

Payment Liability Define the service tax liability against eachof the service tax groups.

Payment Liability (eCess) Define the service tax eCess liabilityagainst each of the service tax groups.

Credit Availed Enter the amount of credit, which will betaken.

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Payment Amount Enter the remaining amount, which needs

to be paid, after setting off with credit.

Note: Credit Available RG23 A, Credit Available RG23 A eCess, Credit Available RG23 A SHE eCess Credit Available RG23 C, Credit Available RG23 C eCess and Credit Available RG23 C SHE eCess amount are based on the selection you made in theExcise as Service Tax Credit periodical activity as explained above.

To utilize Excise as Service Tax Credit, select the specific row and then click Line → Excise Cenvat Claim.

The program will display the following details of Excise as Service Tax Credit accordingto the Excise Component.

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Enter the component wise amount according to the credit available to be utilized againstservice tax liability. You can not enter the amount which is greater than Credit Availed or Service Tax Payment Liability. The program will show an error message if you do so.

Press escape to come out of Excise as Service Tax Credit form.

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In the above mentioned Service Tax Payment form other details are also need to beentered as per specific service tax payment details. Enter the bank account and thecheque number, where the payment is to be made.

Note: In case of a delayed payment, you need to pay interest, which you have tomanually calculate and enter the amount in the payment screen.

Fill in the fields in the Service Tax Payment form according to these guidelines:

Field Description Interest Amount Enter the amount of interest, which has to

be paid for delayed payment.

Int. Account No. Choose the relevant GL account for posting the interest entry.

Other Amount Enter any other amount, which has to bepaid for penalty.

Other Account No. Select the relevant GL account for posting

the entry of other amount.

Post the Service Tax Payment entry.

The program will generate G/L entries. The G/L effects of this Service Tax Payment areexplained below.


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Click Show to view GL effects.

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The above window displays the following detail GL Entry:

Description Dr/Cr AmountService Tax Payable I Account Dr 23,690.00Service Tax Receivable I Account Cr 3,114.00Cenvat Cr. Receivable Account Cr 20,576.00

Service Tax as Excise

Implication for the Manufacturers

Manufacturers are entitled to utilize the credit availed of central excise duties paid on theinputs and capital goods purchased. Manufacturers are also entitled to utilize the creditavailed of the service tax paid on input services consumed in manufacturing of finishedgoods.

For example: A user is a manufacturer of excisable item and has got signed anagreement for developing the quality standard of the goods, the user manufacture withits vendor Delhi Postmaster. The service tax amount paid by the company could beutilized against the Service Tax Payment.

The entry will help you to understand how the program is storing the Availed Credit oninput service.

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Purchase Order

Navigation:Purchases → Order Processing → Purchase Order

In case of a manufacturer who is receiving services from a vendor, the following pointsare needed to be considered:

a) Select the structure, which is denoting Service Tax info from the Service Tax setup.

b) Type must be selected as G/L. The G/L account you are selecting should have themapping with service tax group.

c) The purchase document needs to specify the Services Tax Registration No. field onthe lines as par the location where you are receiving the service.

d) The outstanding amount to the vendor must be paid and applied to the respectivepurchase order/invoice to avail the Service Tax Credit.

To see the service tax calculation press F9 (Statistic), and then post the purchase order .

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Periodical Activities for managing Service Tax as Excise Credit and Excise Duty Payment

Service Tax as Excise Credit:

Same as Excise as Service Tax Credit, you can decide on the Service Tax as ExciseCredit amount. In this periodical activity you can select the records or groups of inputservice records, which are to be utilized against the excise liability.

Navigation:Financial Management → General Ledger → Periodic Activities → Service Tax → Service Tax as Excise Credit


Field DescriptionService Tax Registration No. Choose the service tax registration

number.

Location E.C.C. No Choose the location from where you

provide service and credit to be forwardedas Service Tax as Excise credit.

Choose the Service Tax Registration No. and Location ECC No. from the list Click OK tosee all records of Input Services as par Location. If location is not applicable thenCompany ECC No. will be the default Location ECC No.

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Choose the entry and put a check mark, for which you want to avail credit.

You use Function → Select All, to select all the records or may use UnCheck All toremove check mark from the records .

Remember that if you utilized the availed service tax credit against Payment of

Excise Duty as Service Tax as Excise Credit, those documents which are fullyapplied with the amount you utilized will be removed from this form by theprogram. Only the partial document if any will be lying in this form and will displaythe availed credit in form of Remaining Credit, Remaining Credit (eCess) andRemaining Credit (SHE eCess). This could be use for future setoff of Excise DutyPayment.

Click OK.

Details of the entry you have selected are as below:

Type: Purchase Service Tax Registration No.: BJX118910100578 Posting Date: 01/04/06 Base Amount: 1,800,000 Service Tax Amount: 180,000 Amount: 1,985,400 Service Tax SHE Cess Amount 1,800 Service Tax eCess Amount 3,600 GL Account: 2998 Service Tax Group Code: ADV Service Tax as Excise Yes Closed: No

The above entry shows that INR 180,000 and will be available at the time of payingexcise duty and the document’s Closed status is No.

Note: You can also apply filters on the available records if you are willing to. For example if you want to utilize credit of Advertisement Group, then filter the records onService Tax Group Code. According to this selection, the sum of Service Tax input creditwill be available while you will be using Pay Excise functionality.

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Now according to the selection the cumulative amount of input service tax will beappeared in the Excise CENVAT Claim form as Service Tax as Excise.

Payment of Excise Duty and Service Tax as Excise Credit:

In this section, you will understand how the program is helping you to pay excise andhow you could make the Service Tax as Excise Credit utilized properly.


Fill up the following on the General Journal line:

Journal Batch Name: DEFAULT

Posting Date: Enter the date of Excise Payment Document Type: Keep this field blank Document No.: The program will automatically assign a number E.C.C. No.: BXBVS7543890 (Select the Location ECC number

for which you have to pay Excise)Service Tax Registration No.: BXBVS7543890 (Select the Service Tax

Registration No., if you want to avail input service credit while paying Excise Duty as per Service Tax

as Excise Credit.)

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Account Type: G/L Account Account No.: 2994 (Excise Payable Account)Description: Excise Payable Account Bal. Account Type: G/L Account Bal. Account No.: Keep this field blank

Now click Function → Payment → Excise

The program will open the Pay Excise form. On clicking Apply Entries, the program willopen the Excise Cenvat Claim form.

Service Tax as Excise Credit amount INR 180,000, eCess on Service Tax as ExciseCredit amount INR 3,600 and SHE Cess on Service Tax as Excise Credit amount INR1,800 are same as per your check mark in the Service Tax as Excise field of thePeriodical Activity area of the Service Tax as Excise.

The above form is displaying the credit according to the excise component that youavailed from your purchase input / capital goods, and the liability that arises in your books by selling of excisable goods.

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(Note: The above figures are for example out of some entries made in sales, purchase,and journal. The Service Tax as Excise Credit amount is from the sum of the recordsbased on your selection you have made in the Service Tax as Excise periodical activity.)

Now suppose you want to utilize the whole amount of Service Tax as Excise Credit andeCess on Service Tax as Excise Credit amount. Fill up the form as per example givenbelow:

(Note: The above figures are taken for example. You can make up the liability amountout of credit available in RG 23A, RG23C, PLA and Service Tax as Excise Creditamount if the liability is more.)

Now click Apply Service Tax to allocate the Service Tax as Excise Credit amount withappropriate Service Group.

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(Note: You can allocate the amount from one Service Tax Group or even from differentService Tax Group according to the Credit Available.)

Click Esc key to get back to the Excise Cenvat Claim form. Again click Esc key to getback to the General Journal line.

Press CTRL+F8 to see the details.

The field values will be as below:

Journal Template Name: GENERAL Account Type: G/L Account Account No.: 2994 Posting Date: 01/04/06 Document Type: Blank Document No.: G00339 Description: Excise Payable Account Bal. Account No. Blank Amount: 4,228Excise Bus. Posting Group: GEN Excise Prod. Posting Group: 84.15 ST SED Amount: 400 ST BED Amount: 2,000 ST AED(GSI) Amount: 400 ST SAED Amount: 400 ST eCESS Amount: 64 ST SHE eCESS Amount: 32 ADC VAT Amount: 932

(Note: If the Service Tax Credit you are utilizing against Excise Liability, theService Tax Credit Amount must be applied to Service Tax Group. The programwill restrict and generate an error message. The same message will be appearedin the Test Report.)

You can see the posted information from the history.

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Select the G/L Entry line and click Show to view the details G/L entry.

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The above window shows the following effect in G/L accounts

Description Dr/Cr AmountExcise Payable Account Dr 4,228.00CENVAT Credit. Receivable Account Cr 932.00Service Tax Receivable Account Cr 3,296.00

Update Challan Details

Navigation:Financial Management → General Ledger → Periodic Activities → Service Tax→ Update Challan Details

The service tax amount is required to be paid in the TR-6 Challan form in the specifiedbranches of designated banks. This function will help to keep track of all the Service taxpayments made to the government with relevant challan details. The challan number,challan date, and bank name are updated using this functionality, which in turn will beupdated for each transaction. This will populate another form on which relevant challandetails can be entered for a particular payment document.

The challan details now get updated on each of the transaction lines.

Reports

Input Service Details

Navigation:

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Financial Management → General Ledger → Report → Service Tax Reporting→ Input Service Details

Enter the following information in the Report Request form:

Field DescriptionDate Period From Choose starting month and year

Date Period From Choose ending month and year

Service Tax Group Choose service group

Service Tax Registration No Choose the service tax registration number

Place Define the place of origin

Date Define the submission date

The program will generate the report as below:

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This return is to be filed along with ST-3 form, in case service tax credit on input servicesis availed.

In this report Credit Utilised field shows the amount you have utilized as Service Tax asExcise Credit while Paying Excise Duty or as Credit Utlised against the payment of Service Tax.

Note: The Service Tax reports currently do not address the excise availability as servicetax credit, as the modified format has not been released by any government notificationat the time of release of this functionality.

Appendix

Accounting of Service Tax Example – 1

ABC India Limited is a service provider, has got agreement with PVR Corporation for theadvertisement of its services. The PVR has sent an invoice of INR 110200 oncompletion of advertisement campaign. The breakup of the invoice was INR 100000 for the service, INR 10000 for the Service Tax and INR 200 for eCess on Service Tax. ABC,as per agreement paid the amount within 30 days.

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There will be following accounting effect in the books of ABC.

Entry Type Description Dr/Cr AmountPurchase Advertisement Account Dr 100000.00 Service Tax Receivable Interim Account Dr 10200.00 ABC India Ltd. Account Cr 110200.00 Payment ABC India Ltd. Account Dr 110200.00 Service Tax Receivable Account Dr 10200.00 Service Tax Receivable Interim Account Cr 10200.00 Bank/Cash Account Cr 110200.00

Example – 2

ABC India Limited as a service provider of sewage pollution control consultancy got aproject from its client ‘Washing Detergents LTD’. On completion of the project, ABCsends the invoice of INR 220400 with the breakup of INR 200000 for the service, INR20000 for the Service Tax and INR 400 for the eCess on Service Tax. The payment hasbeen realized in due course.

Following accounting effect will be there in the books of ABC.

Entry Type Description Dr/Cr AmountSales The Washing Detergents LTD. Dr 220400.00 Service Tax Payable Interim Account Cr 20400.00

Consultancy Fee Cr 200000.00 Receipt Cash/Bank Account Dr 220400.00 Service Tax Payable Interim Account Dr 20400.00 Service Tax Payable Account Cr 20400.00 The Washing Detergents LTD. Cr 220400.00

Example – 3

ABC India Limited gained Service Tax Credit of INR 10200 against the input service andreached to a liability of INR 20400. ABC can utilize the available credit to pay the Service

Tax liability.

The following entries will be made.

Entry Type Description Dr/Cr AmountService TaxPayment

Service Tax Payable Account Dr 20400.00

Service Tax Receivable Account Cr 10200.00 Cash/Bank Cr 10200.00

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Example – 4

ABC India Limited as a service provider of sewage pollution control buys a machinery for pollution check, which is excisable capital goods. The machinery is using by them toprovide service and thus ABC can avail the credit they have gained on purchasing themachine while paying service tax. The purchase invoice of capital goods has got INR8800 of Excise Duty.

ABC India Limited gained Service Tax Credit of INR 10200 against the input service andreached to a liability of INR 20400. So ABC could utilize the available credit of Excise asService Tax Credit and Service Tax Input Credit to pay the Service Tax liability.

(Excise as Service Tax Credit) Entry Type Description Dr/Cr AmountService TaxPayment

Service Tax Payable Account Dr 20400.00

Cenvat Cr. Receivable Account Cr 8800.00Service Tax Receivable Account Cr 10200.00Cash/Bank Cr 1400.00

Example – 5

On the other hand XYZ Limited, a manufacturer of excisable goods requires outsourcingsome of the process to produce the finished goods. The jobber prepares the invoice withservice tax and sends it across to XYZ Limited. The invoice has got Service TaxComponent of INR 15500. This amount of service credit can be utilized while payingexcise.

Say XYZ Limited has got an Excise Liability of INR 25000 and excise credit available isINR 15000. Now XYZ can utilize the Service Tax Credit against excise liability.

(Service Tax as Excise Credit)

Entry Type Description Dr/Cr AmountPay Excise Excise Payable Account Dr 25000.00 Cenvat Cr. Receivable Account Cr 15000.00

Service Tax Receivable Account Cr 10000.00 (Thus Service Tax as Excise Credit availed is INR 10000 and utilized against payment of excise the rest amount as (15500 – 10000) INR 5500 will be in the remaining amount)

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Microsoft ® Business Solutions–Navision ® 4.0- Multi Location Taxes (II)

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Calculation of taxes on General Ledger Account & Charge (Item) .......................3 Calculation of VAT on General Ledger Account................................................5

Viewing the Posted Transaction ....................................................................8 Calculation of Excise on General Ledger Account ..........................................11

Calculation of Excise on General Ledger Account through Purchase Order (In case of Supplementary Invoice) .............................................................11 Viewing the Posted Transaction ..................................................................13 Calculation of excise on General Ledger account through Purchase CreditMemo (In case of Supplementary Credit Memo) .........................................20 Viewing the Posted Transaction ..................................................................22 Calculation of Excise on General Ledger Account through Sales Order (Incase of Supplementary Invoice)...................................................................28 Viewing the Posted Transaction ..................................................................30 Calculation of Excise on General Ledger Account through Sales CreditMemo (In case of Supplementary Credit Memo) .........................................37 Viewing the Posted Transaction ..................................................................39

Calculation of Excise on Charge (Item) ...........................................................45 Calculation of excise on Charge (Item) through Purchase Order (In case of Supplementary Invoice) ...............................................................................45 Viewing the Posted Transaction ..................................................................49 Calculation of Excise on Charge (Item) through Purchase Credit Memo (Incase of Supplementary Credit Memo) .........................................................57

Viewing the Posted Transaction ..................................................................62 Calculation of Excise on Charge (Item) through Sales Order (In case of Supplementary Invoice) ...............................................................................69 Viewing the Posted Transaction ..................................................................74 Calculation of Excise on Charge (Item) through Sales Credit Memo (In caseof Supplementary Credit Memo) ..................................................................80 Viewing the Posted Transaction ..................................................................84

Calculation of Service Tax...............................................................................90 Calculation of Service Tax in case of Direct Payment made for Services

Account........................................................................................................90 Viewing the Posted Transaction ..................................................................92

Calculation of Service Tax in case of Direct Payment Received againstServices Account.........................................................................................96 Viewing the Posted Transaction ..................................................................97 Calculation of Service Tax in case of other G/L Account. ..........................102 Viewing the Posted Transaction ................................................................103

Appendix...........................................................................................................108

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Overview of FunctionalityMultilocation taxes functionality facilitate the entry of opening balances and adjustmentsin the statutory records which enable in maintaining, generation of appropriate &accurate statutory records and reports using the existing Navision Localization feature.

This feature includes the computation & recording of taxes on General Ledger Account &Charge (Item).

Detailed Setup

Detailed setups of Excise, Service Tax, and Sales Tax are required for entering openingbalances and doing adjustments in the statuary records. The required setups are alsoused for calculating taxes on G/L Account and Charge (Item).


Following are the comprehensive functionalities covered under Multilocation Taxes.

• Opening Balances in RG 23 A/C Part I• Opening balances in RG 23 A/C Part II• Opening Balances in Daily Stock Account (DSA)• Opening Balances in Personal Ledger Account (PLA)• Opening Balances of Service Tax and eCess• Adjustments in excise reflecting to RG 23 A/C Part I & II and DSA• Adjustments in Service Tax related transactions• Adjustment in VAT• Computation and recoding of Excise and VAT on General Ledger account• Computation and recording of Excise on Charge (Item)• Computation and recording of Service Tax on General Ledger account

Reports

All existing statutory reports of Navision generate the appropriate & accurate records.

Calculation of taxes on General Ledger Account &Charge (Item)

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Setups required

• G/L Account Card• Item Charges

G/L Account Card

Navigation:Financial Management → General Ledger → Chart of Account → Account → Card


Fields Description

Tax Group Code Choose the tax group code from thelookup list to calculate VAT on G/L

Account.This field has already been introduced13702(13705) _VAT Credit on CapitalGoods, Setoff and Refund

Excise Prod. Posting Group Choose the excise production postinggroup from the lookup list to calculateExcise on G/L Account.

Capital Item Place a check mark in the Capital Itemfield to identify item as Capital Item whilecalculating Excise in G/L Account.

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Item Charges

Navigation:Sales & Marketing → Order Processing → Setup → Item charges


Fields Description

Excise Prod. Posting Group Choose the excise production postinggroup from the lookup list to calculateexcise on Item Charges.

Capital Item Place a check mark in Capital Item field toidentify item as Capital Item whilecalculating Excise on Item Charges.

Note: Before calculating taxes on G/L Account and Item Charges, you need to maintainthe other proper setups related to the Excise, Service Tax and VAT.

Calculation of VAT on General Ledger Account

Calculation of VAT on G/L account has already been introduced in 13702(13705) _VAT Credit on Capital Goods, Setoff and Refund.

Please go through with the following example to calculate VAT on G/L account throughthe Purchase Order.

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Initially you should maintain Sales Tax Setup to calculate VAT on G/L Account.

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To calculate VAT, fill the fields in the Purchase Order window as follows:

On the Header:

Buy from Vendor No : 10000 (Vendor State is Andhra Pradesh)Location Code : Blue (Location state is Andhra Pradesh)Structure: VAT

On the Line:

Type : G/L Account No. : 1401 Description : Lease Quantity: 1 Direct Unit Cost: 10000 Line Amount: 10000

Calculate Structure

Press F9 to view the tax amount.

Post the Order.

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Navigation:

Purchases → History → Posted Invoice

G/L Entry

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Particulars Type Amount(Rs)Lease A/C DR 10000Purchase Tax DR 1000To, Vendor CR 11000

Calculation of VAT

Base amount is Rs. 10000 and VAT % is 10.

Tax Amount = 10000*10% = 1000

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In the Detailed Tax Entry window, Input Credit/Output Tax Amount field has the value as1000 and it is further taken for credit in the settlement process.

Note 1: You can calculate VAT/CST on G/L Account through Purchase Order/Invoice,Purchase Credit Memo, Sales Order/Invoice, and Sales Credit Memo.

Note 2: You are also requested to go through the User Manual of 13705_Vat setoff &refund which has been released earlier.

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Calculation of Excise on General Ledger Account

Initially you should prepare the excise setup.

Calculation of Excise on General Ledger Account through PurchaseOrder (In case of Supplementary Invoice)

Navigation:Purchases → Order Processing → Orders


Fields Description

Supplementary Place a check mark in this field so that theprogram can identify it as a supplementaryinvoice. If this field is true then in theinvoice print after posting the program willshow the Supplementary invoice.

Source Document Type Choose the source document type fromdrop down box. The available options are:Posted Invoice and Posted Credit Memo.

source Document No. Choose the source number from thelookup list for the selected source type.

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To calculate excise, fill the fields in the Purchase Order window as follows:

On the Header :

Buy from Vendor No : 10000 Location Code : Blue Structure: Excise

On the Line:

Type : G/L Account No. : 7110 Description : Purchase, Retail Dom.Quantity: 1 Direct Unit Cost: 10000 Line Amount: 10000 Supplementary: True Source Document Type: Posted Invoice Source Document No .: 108054.

Calculate Structure


Post the Order.

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G/L Entry


Particulars Type Amount(Rs)Purchase A/C DR 10000CENVAT Cr. Receivable

A/CDR 1000

To, Vendor CR 11000

Calculation of Excise

Base amount is Rs. 10000 and BED % is 10.

Excise Amount = 10000*10% = 1000

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Excise Entry

The program will create excise entry in case of Supplementary Invoice.

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Through Posted Receipts

The program will also create RG 23 A Part II entry with BED Credit amount.

You can also print/preview the posted supplementary invoice through posted purchaseinvoice by clicking Print.

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The program displays Supplementary Invoice on the right hand side of the invoice andshows the Ref: Posted Invoice with invoice number in the description column.

Note 1: If the Supplementary field in the order line is checked then only report will showSupplementary Invoice. For each line there is an option to select the original invoicenumber for which you are generating supplementary invoice. You can also calculateexcise without placing a check mark in the Supplementary field.

Note 2: If the source document type is posted credit memo it means initially you haveposted a credit memo to your vendor and now you want to adjust some amount withCENVAT against posted credit memo. In this case the program will show ref: postedcredit memo with number in the posted invoice print/preview.

Note 3: If the user wants to calculate excise on G/L account (capital Item) Deferredaccount, then he has to place a check mark in the Capital Item field in G/L Account card.In this case the program will automatically segregate the excise amount and the entrywill be:

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And the posted transaction will flow in RG 23 C Part II in BED Credit field.

You can also calculate excise through the Purchase Invoice.

Note: User can also calculate Secondary and higher education CESS (SHE CESS) bydefining the percentage in excise posting setup.

Calculation of excise on General Ledger account through PurchaseCredit Memo (In case of Supplementary Credit Memo)

Navigation:Purchases → Order Processing → Credit memos


Fields Description

Supplementary Place a check mark in this field so that theprogram can identify it as SupplementaryCredit Memo. If this field is checked then inthe credit memo print after postingprogram will show the Supplementarycredit memo.

Source Document Type Choose the source document type from

Particulars Type Amount(Rs)Purchase A/C DR 10000CENVAT Cr. Receivable A/C DR 500CENVAT Cr. Deferred A/C DR 500

To, Vendor CR 11000

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Fields Descriptionthe drop down box. The available optionsare: Posted Invoice and Posted CreditMemo. It means against which posteddocument you are generatingsupplementary credit memo.

Source Document No. Choose the source document number fromthe lookup list for the selected source type.

To calculate excise, enter the following in the Purchase Credit Memo window .

On the Header:


On the Line:

Type : G/L Account No. : 7110 Description : Purchase, Retail Dom.Quantity: 1 Direct Unit Cost: 5000 Line Amount: 5000 Supplementary: True Source Document Type: Posted Credit Memo Source Document No .: 109010.

Calculate Structure


Post the Credit memo.

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Navigation:

Purchases → History → Posted Credit Memo

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G/L Entry


Particulars Type Amount(Rs)Purchase A/C CR 5000CENVAT Cr. Receivable

A/CCR 500

To, Vendor DR 5500


Base amount is Rs. 5000 and BED % is 10.Excise Amount = 5000*10% = 500

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Excise Entry

The program creates Excise entry in case of Supplementary Credit Memo.

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RG 23 A Part II EntryThrough posted return shipments

The program will also create RG 23 A Part II entry with BED Debit amount.

You can also print/preview the posted supplementary credit memo through posted creditmemo by clicking Print.

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The program displays Supplementary Credit Memo on the right hand side of the CreditMemo and will show the Ref: Posted Credit memo with credit memo number in theDescription column.

Note 1: If the Supplementary field in the credit memo line is checked then only the reportwill show the Supplementary Credit memo. For each line there is an option to select theoriginal credit memo number for which you are generating supplementary credit memo.You can also calculate excise without placing a check mark in the Supplementary field.

Note 2: If the source document type is posted invoice it means initially you have postedan invoice/order to your vendor and now you want to adjust some amount with CENVATagainst posted invoice In this case the program will show ref: posted invoice withnumber in the posted credit memo print/preview.

Note 3: If the user wants to calculate excise on G/L account (capital Item) Deferredaccount, then he has to place a check mark in the Capital Item field in G/L Account card.In this case the program will automatically segregate the excise amount and the entrywill be:

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And the posted transaction will flow in the BED Debit field of RG 23 C Part II.

Note 4: If the user does not have the Return Order granule and the user calculatesexcise through credit memo then excise amount will not reflect in RG 23 A/C Part II.

The user can also calculate excise through Return Order.


Calculation of Excise on General Ledger Account through SalesOrder (In case of Supplementary Invoice)



Fields Description

Supplementary Place a check mark in this field so that theprogram can identify it as supplementaryinvoice. If this field is checked, then the

Particulars Type Amount(Rs)Purchase A/C CR 5000CENVAT Cr. Receivable A/C CR 250CENVAT Cr. Deferred A/C CR 250

To, Vendor DR 5500

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Fields Descriptionprogram will show the SupplementaryInvoice in the invoice print after posting.

Source Document Type Choose the Source document type fromdrop down box. Available options are:Posted Invoice and Posted Credit Memo. Itmeans against which posted documentyou are generating supplementary invoice.

Source Document No. Select the source number from lookup listfor the selected source type.

Enter the following in the Sales Order to calculate excise .

On the Header:


On the Line

Type : G/L Account No. : 6110 Description : Sales, Retail Dom.Quantity: 1 Unit Price: 10000 Line Amount: 10000 Supplementary: True Source Document Type: Posted Invoice Source Document No .: 103028.

Calculate Structure


Post the Order.

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Viewing the Posted TransactionNavigation:Sales & marketing → History → Posted Invoice

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G/L Entry


Particulars Type Amount(Rs)Sales A/C CR 10000Excise Payable A/C CR 1000Customer A/C DR 11000

Calculation of ExciseBase amount is Rs. 10000 and BED % is 10.

Excise Amount = 10000*10% = 1000

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Excise Entry

The program will create Excise Entry in case of Supplementary Invoice.

You can also print/preview the posted supplementary invoice through posted salesinvoice by clicking Print.

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The program displays Supplementary Invoice on the right hand side of the invoice andRef: Posted Invoice with invoice number in the description column.

Note 1: If the Supplementary field in the order line is checked then only the report willshow Supplementary Invoice. Also for each line there is an option to choose the originalinvoice number for which you are generating supplementary invoice. You can alsocalculate excise without placing a check mark in Supplementary field.

Note 2: If the source document type is posted credit memo it means initially you haveposted a credit memo to your customer and now you want to adjust some amount withCENVAT against posted credit memo. In this case the program will show ref: postedcredit memo with number in the posted invoice print/preview.

You can also calculate excise through Sales Invoice.


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Calculation of Excise on General Ledger Account through SalesCredit Memo (In case of Supplementary Credit Memo)

Navigation:Sales & Marketing → Order Processing → Credit memos


Fields Description

Supplementary Place a check mark in this field so that theprogram can identify it as supplementarycredit memo. If this field is checked, thenthe program will show the SupplementaryCredit Memo in the credit memo print after posting.

Source Document Type Select the source document type from dropdown box. The available options are:Posted Invoice and Posted Credit Memo. Itmeans against which posted documentyou are generating supplementary creditmemo.

Source Document No. Choose the source number from lookup listfor the selected source type.

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Enter the following in the Credit Memo to calculate excise.

On the Header:


On the Line:Type : G/L Account No. : 6110 Description : Sales, Retail Dom.Quantity: 1 Direct Unit Cost: 10000 Line Amount: 10000 Supplementary: True Source Document Type: Posted Credit Memo Source Document No .: 104007.

Calculate Structure



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Navigation:Sales & Marketing → History → Posted Credit Memo

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G/L Entry


Particulars Type Amount(Rs)Sales A/C DR 10000Excise Payable A/C DR 1000Customer A/C CR 11000



Excise Amount = 10000*10% = 1000

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Excise Entry

The program creates excise entry in case of Supplementary Credit Memo.

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Through posted return shipments

The program will also create RG 23 A Part II entry with BED credit amount.


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The program displays Supplementary Credit Memo on the right hand side of the CreditMemo and show the Ref: Posted Credit memo with credit memo number in thedescription column.

Note 1: If the Supplementary field in the credit memo line is checked then only the reportwill show the Supplementary Credit memo. For each line there is an option to select theoriginal credit memo number for which you are generating supplementary credit memo.You can also calculate excise without placing a check mark in the Supplementary field.

Note 2: If the source document type is posted invoice it means initially you have postedan invoice/order to your vendor and now you want to adjust some amount with CENVATagainst posted invoice In this case the program will show ref: posted invoice withnumber in the posted credit memo print/preview.

Note 3: If the user wants to calculate excise on G/L account (capital Item) Deferredaccount, then he/she has to place a check mark in the Capital Item field in G/L Accountcard.

And the posted transaction will flow in BED Credit field of RG 23 C Part II.

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The user can also calculate excise through the Return Order.


Calculation of Excise on Charge (Item)

Initially you should prepare the excise setup.

Calculation of excise on Charge (Item) through Purchase Order (Incase of Supplementary Invoice)

Navigation:Purchases → Order Processing → Orders


Fields Description

Supplementary Place a check mark in this field so that theprogram can identify it as supplementaryinvoice. If this field is checked then theprogram will show the SupplementaryInvoice in the invoice print after posting.

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Fields DescriptionSource Document Type Select the source document type from the

drop down box. The available options are:Posted Invoice and Posted Credit Memo. Itmeans against which posted documentyou are generating supplementary invoice.

Source Document No. Select the source number from lookup listfor the selected source type.

Enter the following in the Purchase Order to calculate excise.

On the Header:


On the Line:

Type : Charge (Item) No. : PRICEDIFF Description : Price difference Quantity: 1 Direct Unit Cost: 10000 Line Amount: 10000 Supplementary: True Source Document Type: Posted Invoice Source Document No .: 108065

Calculate Structure


After calculating excise, assign the Item Charge.

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Click Line menu button and select Item Charge Assignment menu item to assign theitem charge with posted receipt.

After clicking Item charge Assignment a new window opens

Click Get Receipt Lines menu item in the Functions menu button to get receipt lines inthe Item charge assignment (purch) window .

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After clicking Get Receipt Lines, Purch. Receipt lines window will open. Select the linefor which you want to calculate excise on charge (item).

Click OK.

After clicking OK in the Purchase Receipt Lines window, the selected receipt line will bedisplayed in the Item Charge Assignment window. You can see that Qty. to Assign fieldand Amount to Assign field are blank.

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Click Suggest Item Charge Assignment with Amount menu item in the Functions menubutton to get the quantity and amount.

After suggesting item charge assignment with amount, you can see that the Qty. to Assign and Amount to Assign fields have got values.

Close the form.

Post the Order.



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G/L Entry

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Particulars Type Amount(Rs)Purchase A/C DR 10000CENVAT Cr. Receivable A/C DR 1000To, Vendor CR 11000

Calculation of ExciseBase amount is Rs. 10000 and BED % is 10.

Excise Amount = 10000*10% = 1000

Excise Entry

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The program creates excise entry in case of Supplementary Invoice.

RG 23 A Part II EntryThrough posted receipts

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The program will also create RG 23 A Part II entry with BED Credit Amount.

You can also print/preview the posted supplementary invoice through posted invoice byclicking Print.

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Note 1: If the Supplementary field in the order line is checked then only the report willshow Supplementary Invoice. For each line there is an option to select the originalinvoice no. for which you are generating supplementary invoice. You can also calculateexcise without placing a check mark in the Supplementary field.

Note 2: If the source document type is posted credit memo it means initially you haveposted a credit memo to your vendor and now you want to adjust some amount withCENVAT against posted credit memo. In this case the program will show ref: postedcredit memo with number in the posted invoice print/preview.

Note 3: If the user wants to calculate excise on Charge (Item) (capital Item) Deferredaccount, then he has to place a check mark in the Capital Item field of the Item Chargesform. In this case the program will automatically segregate the excise amount and theentry will be:

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And the posted transaction will flow in the BED Credit field of RG 23 C Part II.

Note 4: By getting receipt lines, cost amount in the item ledger entry of the originalinvoice will be updated.

The user can also calculate excise through Purchase Invoice.


Calculation of Excise on Charge (Item) through Purchase CreditMemo (In case of Supplementary Credit Memo)

Navigation:Purchases → Order Processing → Credit Memos


Fields Description

Supplementary Place a check mark in this field so that theprogram can identify it as supplementarycredit memo. If this field is checked thenthe program will show the Supplementary

Particulars Type Amount(Rs)Purchase A/C DR 10000CENVAT Cr. Receivable A/C DR 500CENVAT Cr. Deferred A/C DR 500

To, Vendor CR 11000

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Fields DescriptionCredit Memo in the credit memo print after posting.

Source Document Type Choose the source document type fromdrop down box. The available options are:Posted Invoice and Posted Credit Memo. Itmeans against which posted documentyou are generating supplementary creditmemo.


Enter the following in the Credit Memo window to calculate excise.

On the Header:


On the Line:

Type : Charge (Item) No. : PRICEDIFF Description : Price difference Quantity: 1 Direct Unit Cost: 5000 Line Amount: 5000 Supplementary: True Source Document Type: Posted Credit Memo Source Document No .: 109012

Calculate Structure

Press F9 to view the Tax Amount.


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Click Item Charge Assignment menu item in the Line menu button to assign the itemcharge with posted receipt.

A new window opens.

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Click Functions menu button to get return receipt lines in the Item Charge Assignment(purch) window .

After clicking Get Return Receipt Lines menu item, Return Receipt Lines window will beopened. Select the line for which you want to calculate excise on charge (item).

Click OK.

After clicking OK in the Return Receipt Lines window, the selected receipt line will bedisplayed in the Item Charge Assignment window. You can see that Qty. to Assign fieldand Amount to Assign field are blank.

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Click Functions menu button and select Suggest Item Charge Assignment with Amountto get the quantity and amount.

After suggesting item charge assignment with amount, you can see that the Qty. to Assign and Amount to Assign fields have got the values.

Close the form.

Post the Order.

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Navigation:

Purchases → History → Posted Credit Memo

G/L Entry

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Particulars Type Amount(Rs)Purchase A/C CR 5000CENVAT Cr. Receivable A/C CR 500To, Vendor DR 5500



Excise Amount = 5000*10% = 500

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Excise Entry

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The program will create excise entry in case of Supplementary Credit Memo.


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The program will also create RG 23 A Part II entry with BED Debit Amount.


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The program displays Supplementary Credit Memo on the right hand side of the CreditMemo and show the Ref: Posted Credit memo with credit memo number in thedescription column.

Note 1: If the Supplementary field in the credit memo line is checked then only the reportwill show Supplementary Credit memo. For each line there is an option to select theoriginal credit memo number for which you are generating supplementary credit memo.You can also calculate excise without placing a check mark in supplementary field.

Note 2: If the source document type is Posted Invoice, it means initially you have postedan invoice/order to your vendor and now you want to adjust some amount with CENVATagainst posted invoice In this case the program will show ref: posted invoice withnumber in the posted credit memo print/preview.

Note 3: If the user wants to calculate excise on Charge (Item) (capital Item) Deferredaccount, then he has to place a check mark in the Capital Item field in the Item Chargeswindow. In this case the program will automatically segregate the excise amount and theentry will be:

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And the posted transaction will flow in the BED Debit field of RG 23 C Part II.




Calculation of Excise on Charge (Item) through Sales Order (In caseof Supplementary Invoice)



Fields Description

Supplementary Place a check mark in this field so that theprogram can identify it as supplementary

Particulars Type Amount(Rs)Purchase A/C CR 5000CENVAT Cr. Receivable A/C CR 250CENVAT Cr. Deferred A/C CR 250To, Vendor DR 5500

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invoice. If this field is checked then theprogram will show the supplementaryinvoice in the invoice print after posting.

Source Document Type Choose the source document type fromdrop down box. The available options are:Posted Invoice and Posted Credit Memo. Itmeans against which posted documentyou are generating supplementary invoice.


Enter the following in the Sales Order to calculate excise.

On the Header:


On the Line:

Type : Charge (Item) No. : PRICEDIFF Description : Price difference Quantity: 1 Unit price: 10000 Line Amount: 10000 Supplementary: True Source Document Type: Posted Invoice Source Document No .: 103032

Calculate Structure


After calculating excise, assign the Item Charge .

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Click Item Charge Assignment menu item in the Line menu button, to assign the itemcharge with posted receipt .

A new window opens

Click Functions menu button to get shipment lines in the Item Charge Assignment

(sales) window.

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After clicking Get Shipment Lines menu item, Sales Shipment Lines window will be

opened. Select the line for which you want to calculate excise on charge (item).

Click OK.

After clicking OK in the Sales Shipment Lines window, the selected shipment line will bedisplayed in the Item Charge Assignment window. You can see that Qty. to Assign and

Amount to Assign fields are blank.

Click Suggest Item Charge Assignment with Amount menu item in the Functions menubutton to get the quantity and amount.

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After suggesting item charge assignment with amount, you can see that the Qty. to

Assign and Amount to Assign fields have got the values.

Close the form.

Post the Order .

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G/L Entry


Particulars Type Amount(Rs)Sales A/C CR 10000Excise Payable A/C CR 1000Customer A/C DR 11000



Excise Amount = 10000*10% = 1000

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Excise Entry

The program will create Excise entry in case of Supplementary Invoice.

You can also print/preview the posted supplementary invoice through posted invoice byclicking Print.

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Note 1: If the Supplementary field in the order line is checked then only the report willshow the Supplementary Invoice. Also for each line there is an option to select theoriginal invoice number for which you are generating supplementary invoice. You canalso calculate excise without placing a check mark in the Supplementary field.

Note 2: If the source document type is Posted Credit Memo, it means initially you haveposted a credit memo to your customer and now you want to adjust some amount withCENVAT against posted credit memo. In this case the program will show ref: postedcredit memo with number in the posted invoice print/preview.

The user can also calculate excise through the Sales Invoice.


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Calculation of Excise on Charge (Item) through Sales Credit Memo (Incase of Supplementary Credit Memo)

Navigation:Sales & Marketing → Order Processing → Credit memos


Fields Description

Supplementary Place a check mark in this field so that theprogram can identify it as supplementarycredit memo. If this field is checked thenthe program will show the Supplementarycredit memo in the credit memo print after posting.

Source Document Type Choose the source document type fromthe drop down box. The available optionsare: Posted Invoice and Posted CreditMemo. It means against which posteddocument you are generatingsupplementary credit memo.

Source Document No. Select the source number from the lookuplist for the selected source type.

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Enter the following in the credit memo to calculate excise .

On the Header:


On the Line:

Type : Charge (Item) No. : PRICEDIFF Description : Price difference Quantity: 1 Direct Unit Cost: 5000 Line Amount: 5000 Supplementary: True Source Document Type: Posted Credit Memo Source Document No .: 104008

Calculate Structure



Click Item Charge Assignment menu item in the Line menu button to assign the itemcharge with posted receipt.

A new window opens

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Click Functions menu button to get return receipt lines in the Item Charge Assignment(sales) window .

After clicking Get Return Receipt Lines, Return Receipt Lines window will open. You canselect the line for which you want to calculate excise on charge (item).

Click OK.

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After clicking OK in the Return Receipt Lines window the selected return receipt line willbe displayed in the Item Charge Assignment window. You can see that Qty. to Assignfield and Amount to assign field are blank.

Click Suggest Item Charge Assignment with amount menu item in the Functions menubutton to get the quantity and amount.

After suggesting item charge assignment with amount, you can see that the Qty. to Assign and Amount to assign fields have got the values.

Close the form.


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G/L Entry


Particulars Type Amount(Rs)Sales A/C DR 5000Excise Payable A/C DR 500Customer A/C CR 5500


Base amount is Rs. 5000 and BED % is 10.Excise Amount = 5000*10% = 500

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Excise Entry

The program creates excise entry in case of Supplementary Credit Memo.

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The program will also create RG 23 A Part II entry with BED credit Amount.

You can also print/preview the posted supplementary credit memo through PostedCredit Memo by clicking Print.

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The program displays Supplementary Credit Memo on the right hand side of the CreditMemo and show the Ref: Posted Credit memo with credit memo number in the

description column.Note 1: If the Supplementary field in the credit memo line is checked then only the reportwill show the Supplementary Credit memo. Also for each line there is an option to selectthe original credit memo number for which you are generating supplementary creditmemo. You can also calculate excise without placing a check mark in supplementaryfield.

Note 2: If the source document type is posted invoice it means initially you have postedan invoice/order to your customer and now you want to adjust some amount withCENVAT against posted invoice In this case the program will show ref: posted invoicewith number in the posted credit memo print/preview.

Note 3: If the user wants to calculate excise on Charge (Item) (capital Item) Deferredaccount, then he/she has to place a check mark in the Capital Item field in Item Chargeswindow.

And the posted transaction will flow in the BED Credit field of RG 23 C Part II.

Note 4: If the user does not have the Return Order granule and the user calculatesexcise through credit memo then excise amount will not reflect in the RG 23 A/C Part II.

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Calculation of Service Tax

Calculation of Service Tax in case of Direct Payment made forServices Account.

Direct payment made in cash/cheque through the Cash Payment Voucher & BankPayment Voucher.

Cash Payment Voucher

Navigation:Financial Management → Cash Management → Cash Payment Voucher


Fields Description

Service Tax Type Choose the service tax type from thedropdown button. Available options are:Sale and Purchase

TDS/TCS/Service Tax Party Type Choose the required type from the dropdown button. Newly available options are:“Service Tax Vendor” in case service taxtype is “Purchase” and “Service TaxCustomer” in case service tax type is

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Fields Description“Sale”. This is only applicable in case of calculating service tax GL to GL and GL toBank.

TDS/TCS/Service Tax Party Choose the required value from the vendor or customer list.

To calculate service tax while making direct payment against advertisement bill,enter the following information in the Cash Payment Voucher:

Posting Date : 01/02/07 Document Type : Payment Document No .: 26 Service Tax Type : Purchase (select from the dropdown box)TDS/TCS/Service Tax Party Type: Service Tax Vendor (select from the dropdown box)TDS/TCS/Service Tax Party: 10000 Account Type: G/L Account Account No.: 8410 (Advertisement)Debit Amount: 10000 Bal. Account Type : G/L Account Bal. Account No.: 2910 (Cash )

Post the Cash Payment Voucher

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G/L Entry

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Particulars Type Amount(Rs) Advertisement DR 10000Service TaxRecoverable

DR 1224

To, Cash CR 11224


Base amount = Rs. 10000Service tax % = 12eCess % = 2

Tax Amount = 10000*12.24% = 1224

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Service Tax Entry

The program will create service tax entry with detailed information and you can also viewthe service tax entry detail by clicking Amount Received/Paid field in the Service TaxEntry field.

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Service Tax Entry Detail

The program will create the service tax entry detail and the value of service tax andeCess will be available for input service credit.

Note: In case payment has been made by cheque, the user can post the transactionthrough the Bank Payment Voucher. In case payment has been made by cash or cheque has been refunded due to some reason fully or partially then also service tax canbe calculated with document type “Refund”.

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Note: User can also calculate Secondary and higher education CESS (SHE CESS) bydefining the percentage in service tax setup.

Calculation of Service Tax in case of Direct Payment Receivedagainst Services Account.

Direct payment received in cash/cheque through the Cash Receipt Voucher & BankReceipt Voucher.

Bank Receipt Voucher

Navigation:Financial Management → Cash Management → Bank Receipt Voucher


Fields Description

Service Tax TypeChoose the service tax type from thedropdown box. Available options are: Saleand Purchase.

TDS/TCS/Service Tax Party Type Choose the required type from the drop

down button. Newly available options are:“Service Tax Vendor” in case service taxtype is “Purchase” and “Service TaxCustomer” in case service tax type is“Sale”. This is only applicable in case of calculating service tax GL to GL and GL toBank.

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TDS/TCS/Service tax Party Choose the required value from the vendor or customer list.

To calculate service tax while receiving direct payment against advertisement bill, enter the following information in the Bank Receipt Voucher.

Posting Date : 01/02/07 Document Type : Payment Document No .: 253 Service Tax Type : Sale (select from the dropdown box)TDS/TCS/Service Tax Party Type: Service Tax Customer (select from dropdown box)TDS/TCS/Service Tax Party: 10000 Account Type: G/L Account Account No.: 8410 (Advertisement)Credit Amount: 10000 Bal. Account Type : Bank Account Bal. Account No.: Giro

Post the Cash Payment Voucher



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G/L Entry


Particulars Type Amount(Rs) Advertisement CR 10000Service Tax Payable CR 1224Bank DR 11224


Base amount = Rs. 10000Service tax % = 12eCess % = 2.

Tax Amount = 10000*12.24% = 1224

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Service Tax Entry

The program will create service tax entry with detailed information and you can also viewthe service tax entry detail by clicking Amount Received/Paid field in the Service TaxEntry window.

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The program will create the service tax entry detail. The value of service tax and eCesswill be available for making payment of service tax.

Note 1: In case payment has been received in cash, the user can post the transactionthrough Cash Receipt Voucher. In case payment has been received by cash or chequehas been refunded due to some reason fully or partially then also service tax can becalculated with document type “Refund”.

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Calculation of Service Tax in case of other G/L Account.

Direct payment made by Employee.

General Journal



Fields Description

Service Tax TypeChoose the service tax type from thedropdown box. Available options are: Saleand Purchase.

TDS/TCS/Service Tax Party Type Choose the required type from the dropdown button. Newly available options are:“Service Tax Vendor” in case service taxtype is “Purchase” and “Service TaxCustomer” in case service tax type is“Sale”. This is only applicable in case of calculating service tax GL to GL and GL toBank.

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TDS/TCS/Service tax Party Choose the required value from the vendor

or customer list.

To calculate service tax when advertisement bill has been paid directly by the employee,enter the following information in the General Journal.

Posting Date : 09/02/07 Document Type : Payment Document No .: G00166 Service Tax Type : Purchase (select from the dropdown box)TDS/TCS/Service Tax Party Type: Service Tax Vendor (select from dropdown box)TDS/TCS/Service Tax Party: 10000 Account Type: G/L Account Account No.: 8410 (Advertisement)Amount: 10000 Bal. Account Type : G/L Account Bal. Account No.: 5430 (Employee Balances)

Post the Journal



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G/L Entry


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Particulars Type Amount(Rs) Advertisement DR 10000Service Taxrecoverable

DR 1224

Employee balances CR 11224


Base amount = Rs. 10000Service tax % = 12eCess % = 2.

Tax Amount = 10000*12.24% = 1224

Service Tax entry

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The program will create service tax entry with detailed information and you can also viewthe service tax entry detail by clicking Amount Received/Paid field in the Service TaxEntry window.

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The program will create the service tax entry detail. The value of service tax and eCesswill be available for taking credit while making payment of service tax.

Note 1: Service tax can be calculated from the General Journals, Journal Voucher byselecting the balancing account as any general ledger account.


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Appendix

Opening Tax Entries

The existing balances in the tax records (means Central Excise and Service tax)should be posted into the Tax Records as opening balance.

Central Excise

The journal from which one can post the

a. RG 23 A/C Part I (opening quantity particulars).b. DSA (opening quantity particulars).c. PLA (opening balance and components like BED, e-Cess, and

so on).d. RG 23A/C Part II (opening balance of CENVAT credit and thecomponents like BED, e-Cess, and so on).

e. CENVAT Credit Deferred (opening balance of CENVAT creditand the components like BED, e-Cess, and so on).

All the above should be recorded location wise with relevant location details like E.C.C No.

For example:

X Ltd. has a opening balance of 10 units with a CENVAT Credit Rs

10000 (Components: BED Rs 9000 and e-Cess Rs1000), PLA withRs 5000 (Components: BED Rs 4500 and e-Cess Rs 500), FinishedGoods Stock with 10 units and CENVAT Credit Deferred pertaining to2 units of capital assets which were Installed on 12-10-2005 is Rs6000 (Components: BED Rs 5800 and e-Cess Rs 200).

• The RG 23A Part I should be updated with openingquantity of 10 units

• PLA should be updated with the opening balance of Rs5000, the components BED Rs 4500 and e-Cess Rs 500should also be updated

• DSA should be updated with opening quantity of 10 units

• RG 23 A part II should be updated with the openingbalance as Rs 10000, the components BED as Rs 9000and e-Cess as Rs1000

• CENVAT Credit Deferred should be updated with openingbalance as Rs 6000. The components: BED as Rs 5800

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and e-Cess as Rs 200 should be updated along with theentry in RG 23C Part I for 2 units. The date of Installation(12-10-2005) should also be updated.

• Service Tax

The journal from which one can post the:

a. Opening balance of the service tax credit is carried forwardedwith the details of the period from which the balance is carriedforwarded and the components like service tax and e-Cess.

b. Opening balance of the service tax credit with details of components like service tax and e-Cess

c. Opening balance of the service tax payable with details of components like service tax and e-Cess

d. Opening balance of the service tax receivable with details of components like service tax and e-Cess.

All the above should be recorded location wise with relevant location details like Service Tax Registration No.

For example:

X Ltd. has opening balances as:

I. Service tax credit carried forward Rs 1000 pertaining to theperiod ending on 01-4-2006 with components: Service Taxas Rs 800 and e-Cess as 200

II. Service tax credit of the period Rs 5000 with components asService Tax Rs 4500 and e-Cess 500.

III. Service tax payable of Rs 6000 with components as ServiceTax Rs 5600 and e-Cess 400

IV. Balance receivable for the service tax of Rs 1200 withcomponents as Service Tax Rs 900 and e-Cess 300

• Service tax credit carried forward should be updated withRs 1000 with the details of the carried forward from periodending 1-4-2006, Service Tax Rs 800 and e-Cess Rs 200.

• Service tax credit for the period should be updated with Rs5000 with particulars of Service Tax Rs 4500 and e-Cess500.

• Service tax of for the period should be updated with Rs6000 with particulars of Service Tax Rs 5600 and e-CessRs 400

• Service tax receivable should be updated with Rs 1200with particulars of Service tax Rs 900 and e-Cess Rs 300

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Adjustment of Tax Entries

Option for the correction / modification / rectification / adjustment in the tax record(Central excise, Sales tax & VAT, Service tax) components of the tax recordsagainst any GL account and posting into respective tax records should beavailable.

Correction / modification / rectification / adjustment may arise due to occurrenceof any internal or external event. Internal event may be wastage, scrapedmistakes and external event may be change in price or changes in provisions of the respective act.

There are three types of adjustments as: positive adjustment, negativeadjustment, and correction adjustment.

Positive Adjustment: A positive adjustment is the increase in the taxliability, increase in the indirect tax due to increase in sale price or

increase in the tax rate.

For example:X Ltd. has initially charged its customer Y, service tax of Rs 200 @ 20%;the rate got changed to 22% before the receipt of the amount.

The original entry was:Service tax receivable A/C Dr 200Customer Y A/C Cr 200

Now the adjustment entry will be:Service Tax receivable A/C Dr 20

Customer Y A/C Cr 20

In this case there should be provision to post the GL accounts: ServiceTax Receivable A/C and Customer A/C with Rs 20 along with tax records& tax components.

Negative Adjustment: A negative adjustment is the decrease in the taxliability like decrease in the indirect tax due to decrease in sale price or decrease in the tax rate.

For example:X Ltd. has initially charged its customer Y service tax of Rs 200 @ 20%;

the rate got changed to 15% before the receipt of the amount.

The original entry was:Service Tax Receivable A/C Dr 200Customer Y A/C Cr 200

Now the adjustment entry will be:Customer Y A/C Dr 50Service Tax Receivable A/C Cr 50

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In this case there should be provision to post the GL accounts: ServiceTax Receivable A/C and Customer A/C with Rs 50 along with tax records& tax components.

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Microsoft ® Business Solutions–Navision ® 4.0- Multi Location Taxes (I)

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Opening Balances.................................................................................................5 Opening Balance in RG 23 A Part I (Raw Material)...........................................6

Viewing the Posted Transaction ....................................................................7 Opening Balance in RG 23 A Part II (Raw Material)..........................................9

Viewing Posted Transaction ........................................................................10 Opening Balance in RG 23 C Part I (Capital Item) ..........................................13

Viewing the Posted Transaction ..................................................................14 Opening Balance in RG 23 C Part II (Capital Item) .........................................16

Viewing Posted Transaction ........................................................................17 Opening Balance in RG 23 C Part I (Fixed Asset)...........................................20


Opening Balance in RG 23 C Part II (Fixed Assets)........................................23 Viewing Posted Transaction ........................................................................24

Opening Balance in Daily Stock Account (DSA)..............................................27 Viewing Posted Transaction ........................................................................29

Opening Balance in Personal Ledger Account (PLA)......................................31 Viewing Posted Transaction ........................................................................31

Opening Balance in CENVAT Cr. Deferred Account (Capital Item).................35 Viewing the Posted Transaction ..................................................................37

Opening Balance of Service tax ......................................................................41 Service Tax Opening ..........................................................................................43

Service Tax Opening in case of Interim (Purchase) ........................................46

Viewing the Posted Transaction ..................................................................48 Service Tax Opening in case of Interim & Recoverable (Purchase)................51

Viewing the Posted Transaction ..................................................................53 Service Tax Opening in case of Interim (Purchase Credit Memo)...................57

Viewing the Posted Transaction ..................................................................58 Service tax Opening in case of Interim & Recoverable (Purchase Credit Memo& Refund) ........................................................................................................61

Viewing the Posted Transaction ..................................................................63 Service Tax Opening in case of Full Payment Paid to the Vendor and the Vendor Invoice is closed ..............................................................................67 Viewing the Posted Transaction ..................................................................68

Service Tax Entry................................................................................................70 Service Tax Opening in case of Interim (Sale) ................................................72

Viewing the Posted Transaction ..................................................................73 Service tax Opening in case of Interim & Payable (Sale) ................................76

Viewing the Posted Transaction ..................................................................78 Service Tax Opening in case of Interim (Sales Credit Memo).........................82


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Service Tax Opening in case of Interim & Payable (Sales credit memo &Refund) ...........................................................................................................86

Viewing the Posted Transaction ..................................................................88 Service Tax Opening in case of Full Payment is Received from the Customer and the Customer Invoice is closed.................................................................92


Service Tax Opening Balance in case of Advance Payment & Refund .......97 Service Tax in case of Advance Payment is Paid to the Vendor.....................97

Viewing the Posted Transaction ................................................................100 Service Tax in case of Refund Payment Paid; is Received from Vendor against

Advance Payment. ........................................................................................103 Viewing the Posted Transaction ................................................................105

Service tax in case of Advance payment received from Customer................108 Viewing the Posted Transaction ................................................................110

Service tax in case of Refund payment made to the customer against advancepayment. .......................................................................................................114

Viewing the Posted Transaction ................................................................116

Adjustments ......................................................................................................120 Positive Adjustment in Quantities..................................................................120

Positive adjustment in Quantities (increase in the quantity) and reflected inRG 23 A Part I. ..........................................................................................120 Viewing the Posted Transaction ................................................................121 Positive adjustment in Quantities (increase in the quantity) and reflected inRG 23 C Part I. ..........................................................................................123 Viewing the Posted Transaction ................................................................124

Negative Adjustment in Quantities ................................................................126 Negative adjustment in Quantities (Decrease in the quantity) and reflected inRG 23 A Part I. ..........................................................................................126 Viewing the Posted Transaction ................................................................127 Negative adjustment in Quantities (Decrease in the quantity) and reflected inRG 23 C Part I. ..........................................................................................129 Viewing the Posted Transaction ................................................................130

Positive Adjustment related to RG 23 A Part II entries ..................................132 Viewing Posted Transaction ......................................................................133

Negative Adjustment related to RG 23 A Part II entries ................................136 Viewing Posted Transaction ......................................................................137

Positive Adjustment related to RG 23 C Part II entries..................................140 Viewing Posted Transaction ......................................................................141

Negative Adjustment related to RG 23 C Part II entries ................................145 Viewing Posted Transaction ......................................................................146

Positive Adjustment related to DSA...............................................................149 Viewing Posted Transaction ......................................................................151

Negative Adjustment related to DSA.............................................................152 Viewing Posted Transaction ......................................................................154

VAT Adjustments...........................................................................................155 Service Tax Adjustments...............................................................................155

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Adjustment in case of Posted Purchase Invoice. .......................................159 Viewing the Posted Transaction ................................................................162

Adjustment in case of Posted Sales Invoice. .............................................165 Viewing the Posted Transaction ................................................................166

Appendix...........................................................................................................170

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Overview of FunctionalityMultilocation taxes functionality facilitate the entry of opening balances and adjustmentsin the statuary records which enable in maintaining, generation of appropriate & accuratestatutory records and reports using the existing Navision Localization feature.

This feature includes the computation & recording of taxes on General Ledger Account &Charge (Item).

Detailed Setup

Detailed setups of Excise, sales Tax and Service Tax are required for entering openingbalances and doing adjustments in the statutory records. The required setups are alsoused for calculating taxes on G/L Account and Charge (Item).


Following are the comprehensive functionalities covered under Multilocation Taxes.

• Opening Balances in RG 23 A/C Part I• Opening balances in RG 23 A/C Part II• Opening Balances in Daily Stock Account (DSA)• Opening Balances in Personal Ledger Account (PLA)• Opening Balances of Service Tax and eCess• Adjustments in excise reflecting to RG 23 A/C Part I & II and DSA• Adjustments in Service Tax related transactions• Adjustment in VAT• Computation and recoding of Excise and VAT on General Ledger account• Computation and recording of Excise on Charge (Item)• Computation and recording of Service Tax on General Ledger account

Reports

All existing statutory reports of Navision generate the appropriate & accurate records.

Opening Balances

Opening balances of central excise are recoded in the registers, for statutoryrequirement.

Note: It is recommended to create setups related to excise, before updating the exciseopening balances in the registers.

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Opening Balance in RG 23 A Part I (Raw Material)

Navigation:Purchase → Inventory & Costing → Item Journal


Field Description

Excise Entry Place a check mark in this field if you wantto reflect the transaction in RG 23 A Part Iand RG 23 C Part I.

To update the opening balances in RG 23 A Part I (in case of Raw Material), fill thefields in the Item Journal window as follows:

Posting Date : 31/03/06 Entry Type : Purchase or Positive Adjustment Document No. : T00042 Item No. : 1000 Description : Bicycle Location : Blue Quantity : 100 Unit of Measurement : Pcs Unit Amount : 350.595 Excise Entry : True Amount : 35059.50

Post the Item Journal

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In the above screens, you can see that the program has updated the followinginformation based on the posted transaction through the Item Journal.

Posting date : 31/03/06 Description : Bicycle Base Unit of Measure : Pcs.Quantity Received : 100

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Closing Stock : 100 Location Code : Blue Location ECC No. : BXBVS7543890 Item No. : 1000 Document No. : T00042 Type : Purchase Quantity : 100

In the report RG 23 A Part I, you can view this Quantity Received as opening balance if there is any other transaction posted after this entry.

Note: At the time of updating opening balances for Item/Capital Item, you have toupdate the quantity in RG 23 A Part I and in RG 23 C Part I.

Opening Balance in RG 23 A Part II (Raw Material)


To update the opening balances in RG 23 A Part II (in case of Raw Material), fill thefields in the General Journal window as follows:

Posting Date : 31/03/06 Document No. : G00029 Account No. : 2993 E.C.C. No. : BXBVS7543890 Description : Cenvat Cr. Receivable Account

Excise Charge : True Excise Record : RG 23 ABED Amount : 5000 AED (GSI) Amount : 1000 ECess Amount : 500 Amount : 6500 Bal. Account Type : G/L Account Bal. Account No. : 2993 Post the General Journal

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Viewing Posted Transaction


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G/L Entry


Particulars Type Amount(Rs)Cenvat Cr. Receivable

AccountDR 6500

To, Cenvat Cr. Receivable Account

CR 6500

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In the above screen, you can see that the program has updated the followinginformation based on the posted transaction through the General Journal.

Posting date : 31/03/06 BED Credit : 5000 AED (GSI) Credit : 1000 Closing Bal. BED/AED : 6000

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Closing Bal. other duties : 500 Total BED Amount : 5000 Total AED (GSI) Amount : 1000 Total eCess Amount : 500 Location E.C.C. No. : BXBVS7543890 Document No. : G00029 Type : Purchase ECess Credit : 500

In the report RG 23 A Part II, you can view the amounts as Opening Balance of Duty inCredit if there is any other transaction posted after this entry.

In the above transaction there will be no effect of amount in the G/L Account (2993),because 2993 is debited as well as credited at the same time.

Note: User can also update the opening balances for Secondary and higher educationCESS (SHE CESS)

Opening Balance in RG 23 C Part I (Capital Item)



Field Description

Excise Entry Place a check mark in this field, if you wantto reflect the transaction in RG 23 A Part Iand RG 23 C Part I.

To update the opening balances in RG 23 C Part I (in case of Capital Item), fill thefields in the Item Journal window as follows :

Posting Date : 31/03/06

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Entry Type : Purchase or Positive Adjustment Document No. : T00043 Item No. : 1001 (Capital Item field is True in Item Card) Description : Touring Bicycle Location : Blue Quantity : 50 Unit of Measurement : Pcs Unit Amount : 350.595 Excise Entry : True Amount : 17529.75



Navigation:


General Ledger →

History→

Navigate

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In the above screen, you can see that the program has updated the followinginformation based on the posted transaction through the Item Journal.

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Posting date : 31/03/06 Description : Touring Bicycle Base Unit of Measure : Pcs. Quantity Received : 50 Closing Stock : 50 Location Code : Blue Location ECC No. : BXBVS7543890 Item No. : 1001Document No. : T00043 Type : Purchase Quantity : 50

In the report RG 23 C Part I, you can view this Quantity Received as opening balance if any other transaction is posted after this entry.

Note: At the time of updating opening balances for Item/Capital Item, you have toupdate the quantity in RG 23 A and C Part I.

Opening Balance in RG 23 C Part II (Capital Item)


To update the opening balances in RG 23 C Part II (in case of Capital Item); fill thefields in the Item Journal window as follows:

Posting Date : 31/03/06 Document No. : G00030 Account No. : 2993 E.C.C. No. : BXBVS7543890 Description : Cenvat Cr. Receivable Account Excise Charge : True Excise Record : RG 23 C BED Amount : 10000 AED (GSI) Amount : 5000 ECess Amount : 1000 Amount : 16000

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Bal. Account Type : G/L Account Bal. Account No. : 2993 Post the General Journal



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G/L Entry



AccountDR 16000

To, Cenvat Cr. Receivable

Account

CR 16000

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Posting date : 31/03/06 BED Credit : 10000 AED (GSI) Credit : 5000 Closing Bal. Credit CY : 16000 ECess Credit : 1000 Location E.C.C. No. : BXBVS7543890 Total BED for current year : 10000 Total AED (GSI) for CY : 5000 Total eCess for CY : 1000

In the report RG 23 C Part II, you can view the amounts as opening Balance of Duty inCredit if there is any other transaction posted after this entry.

There will not be any effect of amount in the G/L Account (2993) in the abovetransaction, because 2993 is debited as well as credited at the same time.


Opening Balance in RG 23 C Part I (Fixed Asset)

Navigation:Financial Management → Fixed Asset → FA Journal


Field Description

Excise Entry Place a check mark in this field, if you wantto reflect the transaction in RG 23 C Part I.

Location Code Choose the location code from lookup listto flow the Location ECC No. in RG 23 CPart I.

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To update the opening balances in RG 23 C Part I (in case of Fixed Assets), fill thefields in the Fixed Assets Journal window as follows:

Posting Date : 31/03/06 Document No. : F00007 FA No. : FA000010 Description Book Code : Company FA Posting Type : Acquisition Description : Mercedes 300 Amount : 500000 Location : Blue Excise Entry : True

Post the FA Journal



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RG 23 C Part I

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In the above screen, you can see that the program has updated the followinginformation based on the posted transaction through the FA Journal.

Posting date : 31/03/06 Description : Mercedes 300 Quantity Received : 1Document No. : F00007 Closing Stock : 1FA No. /Item No. : FA 000010 Location Code : Blue Location ECC No. : BXBVS7543890 Type : Purchase Quantity : 1 Product Type : FA

In the report RG 23 C Part I, you can view this Quantity Received as opening Balance if any other transaction is posted after this entry.

Note: As suggested in the User Guide of Fixed Assets that for each Asset, you have tocreate separate FA Card. Taking this into consideration there is no need to enter thequantity in FA Journal while updating the opening balance, the program willautomatically take the quantity as 1.

Note: At the time of updating opening balances for fixed assets, you have to update thequantity in RG C Part I.

Opening Balance in RG 23 C Part II (Fixed Assets)


To update the opening balances in RG 23 C Part II (in case of Fixed Assets), fill thefields in General Journal window as follows:


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Document No. : G00031 Account No. : 2993 E.C.C. No. : BXBVS7543890 Description : Cenvat Cr. Receivable Account Excise Charge : True Excise Record : RG 23 C BED Amount : 20000 AED (GSI) Amount : 10000 ECess Amount : 5000 Amount : 35000 Bal. Account Type : G/L Account Bal. Account No. : 2993

Post the General Journal



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G/L Entry


Particulars Type Amount(Rs)Cenvat Cr. Receivable Account

DR 35000

To, Cenvat Cr. Receivable Account

CR 35000

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Posting Date : 31/03/06 Opening Balance Cr. CY : 16000 (Value that has been entered for Capital Item in the

previous Screen)Closing Bal. Credit CY : 51000 (16000 previous + 35000 for this transaction ) BED Credit : 20000 AED (GSI) Credit : 10000 ECess Credit : 5000 Location ECC No. : BXBVS7543890 Total BED for Current Y : 30000 (10000 previous + 20000 for this transaction)Excise Accounting Type : With CENVAT Total AED (GSI) for CY : 15000 (5000 previous + 10000 for this transaction) Total eCess for CY : 6000 (1000 previous + 5000 for this transaction)

In the report RG 23 C Part II, you can view the amounts as opening Balance of Duty inCredit if there is any other transaction posted after this entry.



Opening Balance in Daily Stock Account (DSA)

Navigation:

Purchase→

Inventory & Costing→

Item Journal

To update the opening balances in DSA, fill the fields in Item Journal window asfollows:

Posting Date : 31/03/06 Entry Type : Purchase or Positive Adjustment Document No. : T00062

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Item No. : 70062 ( In Item Card Replenishment The program should be prod. Order)

Description : Finished Goods Location : Blue Quantity : 100 Unit of Measurement : Pcs


Generate DSA to populate the opening balance in the DSA.

Navigation:Financial Management → General Ledger → Periodic Activity → Excise → Generate DSA

Enter the following information on the Item tab

No.: 70062 (Item No. for which you want to update the DSA)

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Enter the following information on the Options tab

Location Code: Blue (Choose from lookup list)Date: 31/03/06 (Enter the date in which you have posted the

Item Journal)Click Ok


DSA Entry

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In the above screen, you can see that the program has updated the followinginformation based on the posted transaction through the Item Journal .

Posting date : 31/03/06 Item No. : 70062

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Closing Balance : 100 Location Code : Blue Other Quantity : 100

If you run the DSA report for 31/03/06, Other Qty field will show the value as 100 andClosing Stock field will show the value as 100.

In the Daily Stock Account report, you can view the opening balance (100) if any other transaction is posted after this entry.

Opening Balance in Personal Ledger Account (PLA)


To update the opening balances in PLA, fill the fields in General Journal window

as follows:

Posting Date : 31/03/06 Document No. : G00033 Account No. : 2997 E.C.C. No. : BXBVS7543890 Description : PLAPLA : True PLA BED Amount : 5000 PLA AED (GSI) Amount : 1000 PLA ECess Amount : 500 Amount : 6500

Bal. Account Type : G/L Account Bal. Account No. : 2997



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G/L Entry

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Particulars Type Amount(Rs)PLA DR 6500To, PLA CR 6500

PLA Entry

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In the above screen, you can see that the program has updated the followinginformation based on the posted transaction through the General Journal .

Description : PLA Document No. : G00033 Posting Date : 31/03/06 BED Credit : 5000 BED Balance : 5000 Other Duties Credit : 1500 Other Duties Balance : 1500

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Balance BED : 5000 Balance AED (GSI) : 1000 Balance eCess : 500 Location ECC No. : BXBVS7543890 BED Credit : 5000 AED (GSI) Credit : 1000 ECess Credit : 500

In the PLA report, you can view the amounts as opening balance if any other transactionis posted after this entry.



Opening Balance in CENVAT Cr. Deferred Account (Capital Item)


To update the opening balances in CENVAT Cr. Deferred A/C (Capital Item), fill thefields in the General Journal window as follows:

Posting Date : 31/03/06 (Enter the date of purchase of capital item) Document No. : G00034

Account No. : 2996 E.C.C. No. : BXBVS7543890 Description : CENVAT Cr. Deferred Excise Charge : True Deferred : True BED Amount : 10000 AED (GSI) Amount : 5000 Amount : 15000 Bal. Account Type : G/L Account

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Bal. Account No. : 2996


After posting the General Journal, the program will update the RG 23 C Part II with theTotal BED and AED (GSI) for the next year.

After updating the RG 23 C Part II for Deferred amount, now run the “Claim DeferredExcise” batch job to take the credit of the excise amount in the next year.

Navigation:Financial Management → General Ledger → Periodic Activity → Excise → ClaimDeferred Excise.

Enter the following Information on the Option tab:

Document No. : G00034 (Document number of the posted transaction at the time of updating opening balance)

Posting Date : 01/04/07 (Posting date on which the program will reverse the transaction from CENVAT Cr. Deferred A/C to CENVAT Cr. Receivable A/C), Date should be next year date of the purchase.

Location E.C.C. No. : BXBVS7543890 (Same as entered in the opening balance transaction).

Click OK to run the batch job.

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G/L Entry

The program creates the following entries:

G/L entry for opening balance

G/L entry after running the batch job (transferring the excise amount from deferredaccount to Receivable account)

Particulars Type Amount(Rs)CENVAT Cr. Deferred A/C DR 15000To, CENVAT Cr. Deferred A/C CR 15000

Particulars Type Amount(Rs)CENVAT Cr. Receivable A/C DR 15000To, CENVAT Cr. Deferred A/C CR 15000

Now CENVAT Cr. Deferred A/C has a credit balance of Rs. 15000 and it will only settledif the user will update the opening balance of G/L account (Debit the CENVAT Cr.Deferred A/C) with Rs. 15000 while updating the Trial Balance.

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RG 23 C Part II Entry (Opening balance)

In the above screen, Total BED for Next Year field has the value as 10000 and Total AED (GSI) for Next Year field has the value as 5000.

The program has also updated the Location ECC No. with posting date.

Also Deferred field in the excise entry will get the checked status after posting thetransaction .

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RG 23 C Part II Entry after running the batch job (transferring the exciseamount from deferred account to Receivable account)

In the above screen, you can see that the program has transferred the 10000 amountfrom Total BED for Next Year field to Total BED for Current Year field and 5000 amountfrom Total AED (GSI) for Next Year field to Total AED (GSI) for CY field.

It means that, you can avail the credit of the excise amount.

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Note: The posting date of deferred entry at the time of updating the RG23 C Part IIshould be the date of purchase and the posting date in Claim Deferred Excise batch jobshould be one year later to the date of purchase.


Opening Balance of Service tax

Note 1: It is recommended to create setups related to Service tax before updatingservice tax opening balances in the service tax entry and service tax entry details tables.

Note 2: Initially user is advised to update vendor and customer balances in the systembefore entering the opening balances of service tax. Also update the payments related tovendor and customer. After entering invoice and payment for vendor and customer youhave to apply both before entering the opening balances of service tax.

It is mandatory to have vendor and customer ledger entry before entering openingbalances of service tax in the system.

Examples:

1. In case of Customer closing balance as on 31/03/06 is Rs. 11224 (10000 is base,1200 service tax and 24 is eCess) and if you have received Rs. 10000 from thecustomer and the balance 1224 is yet to be received.

Solution: Update the opening balance of customer for Rs. 11224 and also updatepayment opening for Rs. 10000. After entering the customer details apply these twoentries before entering the opening balances of service tax and eCess.

2. In case of vendor closing balance as on 31/03/06 is Rs. 22448 (20000 is base, 2400is service tax and 48 is eCess amount) and if you have paid Rs. 20000 to the vendor and the balance of 2448 is yet to be paid.

Solution: Update the opening balance of vendor for Rs. 22448 and also updatepayment opening for Rs. 20000. After entering the vendor details apply these two entriesbefore entering the opening balances of service tax and eCess.

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Setup for Service Tax Opening

Navigation:Financial Management → General Ledger → Setup → Trial Codes → SourceCode Setup

Select the source code from lookup list in Service Tax Opening and Service Tax Adjustment fields.

Service Tax Batches

Navigation:Financial Management → Setup → Service Tax → Service Tax Batches

Before entering the opening balances of service tax, you must create batch throughservice tax batches.

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Create the Service Tax batches by entering the following fields :

Fields Description

Journal Batch Name Enter the code of the batch, you want tocreate (For example: Opening)

Description Enter the description of the code, you haveentered.

Type Choose the type from the down button.The available options are: Opening and

Adjustment.

Source code Choose the source code from the lookuplist.

Service Tax Opening

Navigation:Financial Management → General Ledger → Periodic Activity → Service Tax → Service Tax Opening

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New Interface has been provided to enter the opening balances of service tax.


Fields Description

Type Choose the type from the drop downbutton. The available options are: Sale andPurchase.

Transaction No. Choose the transaction number from thelookup list. By clicking the assist buttoncustomer/vendor ledger entries will beopen.

Posting date The program will show the posting date of the selected transaction in this field. Thisfield is editable.

Service Tax on Advance Payment This field is not editable and will be flow(True) in case of advance payment fromvendor and customer ledger entries.

Document Type The program will show the document typeof the selected transaction in this field. Thisfield is editable.

Document No. The program will show the documentnumber of the selected transaction in thisfield. This field is editable.

Party Code This field will show the party code of theselected transaction. This field is editable.

Service tax group code Choose the service tax group code fromthe lookup list.

Service tax registration No. Select the service tax registration number from the lookup list.

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Fields Description

Location Code Select the Location Code from Lookupbutton.Program will flow the Location ECC No. inthe service tax entry and service tax entrydetails after selecting location code.This exercise will help the user to take thecredit of service tax while making paymentof Excise duty.

Service tax base amount Enter the service tax base amount onwhich service tax has to be calculated.

Service tax amount The program will automatically calculatethe service tax amount based on thepercentage defined in the Service Taxsetup.

eCess Amount The program will automatically calculatethe eCess amount based on thepercentage defined in the setup.

Payable/Receivable Amount This field shows the amount which isrelated to the selected transaction number.

Service Tax % This field shows the service tax percentagethat has been defined in the setup.

Service Tax eCess % This field shows the service tax eCesspercentage that has been defined in thesetup.

ST Rec./Pay. Account (Interim) This field contains the Service TaxReceivable/Payable Account (Interim)account.

ST Rec. /Pay. Account This field contains the Service TaxRecoverable and Payable accountnumber.

Amount received/paid This field shows the amount, which will bebased on the selected transaction.

Remaining amount In case of purchase transaction, theprogram will show the remaining amount of service tax in this field, which is stillpending to take credit.

Remaining eCess amount In case of purchase transaction, the

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Fields Descriptionprogram will show the remaining amount of eCess in this field, which is still pending totake credit.

Remaining Service tax Amount This field shows the remaining amount of service tax in case of advance payment.

Remaining Service tax eCess amount This field shows the remaining amount of service tax eCess in case of advancepayment

Remaining Service tax base amount This field shows the remaining amount of service tax base in case of advancepayment

Bal. Account Type (Interim) By default the program will show ‘G/L Account’ in this field

Bal. Account No. (Interim) By default the program will show theinterim account number in this field.

Bal. Account Type By default the program will show the ‘G/L Account’ in this field.

Bal. Account No. By default the program will show thepayable or recoverable account number inthis field.

Note: Also you can post the transactions with dimensions available on the Line menubutton in the form.

Service Tax Opening in case of Interim (Purchase)

Enter the opening balance in case of vendor invoice which is still pending for paymentand service tax has been calculated at the time of creating invoice.

Initially enter the opening balance of vendor including service tax amount.

In Service Tax Opening form, select the type as “Purchase” and select the transactionfrom the lookup list.

After clicking the assist button, Vendor Ledger Entry window opens, in which you canselect the transaction for which you want to update the opening balances of service tax.Some fields will get populated on selection of transaction no. like Doc. No., date, Partycode, Payable Amount, Amount received/paid.

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Enter the following Information in the Service Tax Opening form

Type: Purchase Transaction No.: 257 (Selected from vendor ledger entry) Posting Date: 31/03/07 Document Type: Invoice Document No.: G00032 Party Code: 10000 Service Tax Group Code: Adv.Service Tax Registration No.: BJX118910100578 Service Tax Base Amount: 10000 Service Tax Amount: 1200 eCess Amount: 24 Payable/Receivable Amount: -11224

Service Tax %: 12 Service tax eCess %: 2 ST. Rec./ Pay. (Interim)A/C: 5926 Bal. Account Type (Interim): G/L Account Bal. Account No. (Interim): 5926

Post the Service Tax Opening Journal.

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G/L Entry

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Particulars Type Amount(Rs)Service Tax Receivable Interim

A/CDR 1224

To, Service Tax receivableInterim A/C CR 1224

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Service Tax Entry

The program will update service tax entry for the posted transaction with service taxregistration number and other details.

At the time of making payment to vendor from Navision, journals applying with vendor entry system will create the Service Tax Entry Detail.

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Service Tax Opening in case of Interim & Recoverable

(Purchase)

Enter the opening balance in case vendor invoice and partial payment have been madeto the vendor and service tax has been calculated at the time of creating invoice.

Initially enter the opening balance of vendor including service tax amount. Also enter thepayments that have been paid to the vendor and apply both entries before entering theopening balances of service tax.

In Service Tax Opening form select the type as “Purchase” and select the transactionfrom the lookup list.

After clicking the assist button, Vendor Ledger Entry window opens, in which you canselect the transaction for which you want to update the opening balances of service tax.

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Type: Purchase Transaction No.: 275 (Selected from vendor ledger entry) Posting Date: 31/03/07 Document Type: Invoice Document No.: G00045 Party Code: 10000 Service Tax Group Code: Adv.Service Tax Registration No.: BJX118910100578 Service Tax Base Amount: 10000 Service Tax Amount: 1200 eCess Amount: 24 Payable/Receivable Amount: -11224 Service Tax %: 12 Service Tax eCess %: 2 ST. Rec./Pay. (Interim)A/C: 5926 Bal. Account Type (Interim): G/L Account Bal. Account No. (Interim): 5926 ST. Rec/Pay Account : 2998 Amount Received/Paid : 10000 Remaining Amount : 1069.14 Remaining eCess Amount : 21.38 Bal. Account type : G/L Account Bal. Account No .: 2998


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G/L Entry

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Particulars Type Amount(Rs)Service Tax Receivable Interim A/C DR 1224

To, Service Tax Receivable Interim A/C

CR 1224

Service Tax Recoverable A/C DR 1090.52Service Tax Recoverable A/C CR 1090.52

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Service Tax Entry


You can view the service tax entry details by clicking the lookup button in AmountReceived/Paid field of the Service Tax Entry window.

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The program will create service tax entry detail and the transaction will available to takecredit while making payment of service tax liability.

At the time of making the balance payment to the vendor, the program will create theservice tax entry details.


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Service Tax Opening in case of Interim (Purchase Credit Memo)

Enter the opening balance of service tax in case of purchase credit memo.Initially enter the opening balance of vendor (Credit memo) including service tax amount.


After clicking the assist button, Vendor Ledger Entry window opens, in which you canselect the transaction for which you want to update the opening balances of service tax.

Enter the following Information in the Service tax Opening form

Type: Purchase Transaction No.: 282 (Selected from vendor ledger entry) Posting Date: 31/03/07 Document Type: credit memo Document No.: G00048

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Party Code: 10000 Service Tax Group Code: Adv.Service Tax Registration No.: BJX118910100578 Service Tax Base Amount: -5000 Service Tax Amount: -600 eCess Amount: -12 Payable/Receivable Amount: 5612 Service Tax %: 12 Service Tax eCess %: 2 ST. Rec./Pay. (Interim)A/C: 5926 Bal. Account Type (Interim): G/L Account Bal. Account No. (Interim): 5926

Post the Service tax Opening Journal.



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G/L Entry



A/CDR 612

To, Service Tax ReceivableInterim A/C

CR 612

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Service Tax Entry


At the time of making refund to vendor from Navision, journals applying with vendor entry system will create the service tax entry detail.


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Service tax Opening in case of Interim & Recoverable (Purchase Credit Memo & Refund)

Enter the opening balance in case of vendor purchase credit memo and the partialpayment has been refunded by the vendor and service tax has been calculated at thetime of creating credit memo.

Initially enter the opening balance of vendor including service tax amount and also therefund that have been paid received by the vendor and apply both entries beforeentering the opening balances of service tax.


After clicking the assist button, Vendor ledger Entry window opens in which you canselect the transaction for which you want to update the opening balances of service tax.

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Enter the following Information in the Service tax Opening form

Type: Purchase Transaction No.: 296 (Selected from vendor ledger entry) Posting Date: 31/03/07 Document Type: credit memo Document No.: G00065 Party Code: 10000 Service Tax Group Code: Adv.Service Tax Registration No.: BJX118910100578 Service Tax Base Amount: -5000 Service Tax Amount: -600 eCess Amount: -12 Payable/Receivable Amount: 5612 Service Tax %: 12 Service tax eCess %: 2 ST. Rec./Pay. (Interim)A/C: 5926 Bal. Account Type (Interim): G/L Account Bal. Account No. (Interim): 5926 ST. Rec/Pay Account : 2998 Amount Received/Paid : -2000 Remaining Amount : -213.83 Remaining eCess Amount : -4.28 Bal. Account type : G/L Account Bal. Account No .: 2998


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G/L Entry

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A/CDR 612

To, Service Tax receivableInterim A/C CR 612

Service Tax Recoverable DR 218.11Service Tax Recoverable CR 218.11

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Service Tax Entry


You can view the service tax entry detail by clicking the the lookup button in AmountReceived/Paid field of the Service Tax Entry window.

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The program will update service tax entry detail with negative values and document typewill be refunded.

At the time of receiving balance payment (refund) from the vendor, the program willcreate the service tax entry details.


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Service Tax Opening in case of Full Payment Paid to the Vendor and the Vendor Invoice is closed .

In case full payment is paid to the vendor and the vendor invoice is closed, you candirectly enter the opening balances of service tax and there is no need to create the

vendor balances.

Service Tax Opening form


Enter the following Information in the Service Tax Opening form:

Type: Purchase Transaction No.: Blank Posting Date: 31/03/07

Document Type: Payment Document No.: Op001 Party Code: Blank or you can give the party code. Service Tax Group Code: Adv.Service Tax Registration No.: BJX118910100578 Service Tax Base Amount: 100000 Service Tax Amount: 12000 eCess Amount: 240 Payable/Receivable Amount: -112240

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Service Tax %: 12 Service Tax eCess %: 2 ST. Rec./Pay. (Interim)A/C: 5926 Bal. Account Type (Interim): G/L Account Bal. Account No. (Interim): 5926 ST. Rec/Pay Account : 2998 Amount Received/Paid : 112240 Remaining Amount : 12000 Remaining eCess Amount : 240 Bal. Account Type : G/L Account Bal. Account No .: 2998




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G/L Entry


Particulars Type Amount(Rs)Service Tax Recoverable DR 12240Service Tax Recoverable CR 12240

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Service Tax Entry


You can view the service tax entry detail by clicking the lookup button in AmountReceived/Paid field of the Service Tax Entry window.

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The program will update service tax entry detail with positive values. Document type willbe payment and the service tax amount will be available for credit at the time of makingpayment of service tax liability.

Note: You can enter the opening balances of document type “refund” in case all creditnotes are closed.


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Service Tax Opening in case of Interim (Sale)

Enter the opening balance in case of customer invoice which is still pending for paymentand service tax has been calculated at the time of creating invoice.

Initially enter the opening balance of customer including service tax amount.

In Service Tax Opening form, select the type as “Sale” and select the transaction fromthe lookup list.

After clicking the assist button, Customer Ledger Entry window opens in which you canselect the transaction for which you want to update the opening balances of service tax.


Type: Sale Transaction No.: 324 (Selected from customer ledger entry) Posting Date: 31/03/07 Document Type: Invoice Document No.: G00067 Party Code: 10000 Service Tax Group Code: Adv.Service Tax Registration No.: BJX118910100578

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Service Tax Base Amount: - 10000 Service Tax Amount: - 1200 eCess Amount: - 24 Payable/Receivable Amount: 11224 Service Tax %: 12 Service tax eCess %: 2 ST. Rec./Pay. (Interim)A/C: 5925 Bal. Account Type (Interim): G/L Account Bal. Account No. (Interim): 5925




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G/L Entry


Particulars Type Amount(Rs)Service Tax Payable Interim

A/CDR 1224

To, Service Tax Payable Interim A/C

CR 1224

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Service Tax Entry


At the time of receiving payment from customer from Navision, journals applying withcustomer entry system will create the service tax entry detail.

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Service tax Opening in case of Interim & Payable (Sale)

Enter the opening balance in case of customer invoice and the partial payment havebeen received from the customer and service tax has been calculated at the time of creating invoice.

Initially enter the opening balance of customer including service tax amount and also thepayment that have been received from the customer. Apply both entries before enteringthe opening balance of service tax.

In Service Tax Opening form select the type as “Sale” and select the transaction fromthe lookup list.

After clicking the assist button, Customer Ledger Entry window opens, in which you canselect the transaction for which you want to update the opening balances of service tax.

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Type: Sale Transaction No.: 327 (Selected from customer ledger entry) Posting Date: 31/03/07 Document Type: Invoice Document No.: G00069 Party Code: 10000 Service Tax Group Code: Adv.Service Tax Registration No.: BJX118910100578 Service Tax Base Amount: - 10000 Service Tax Amount: - 1200 eCess Amount: - 24 Payable/Receivable Amount: 11224 Service Tax %: 12 Service Tax eCess %: 2 ST. Rec./Pay. (Interim)A/C: 5925 Bal. Account Type (Interim): G/L Account Bal. Account No. (Interim): 5925 ST. Rec/Pay Account : 5923 Amount Received/Paid : -10000 Remaining Amount : 0 (Only applicable in purchase type transaction)Remaining eCess Amount : 0(Only applicable in purchase type transaction)Bal. Account Type : G/L Account Bal. Account No .: 5923


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G/L Entry

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Particulars Type Amount(Rs)Service Tax Payable Interim A/C DR 1224

To, Service Tax payable Interim A/C

CR 1224

Service Tax Payable A/C DR 1090.52Service Tax Payable A/C CR 1090.52

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Service Tax Entry


You can view the service tax entry detail by clicking the lookup button in AmountReceived/Paid field in the Service Tax Entry window.

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The program will create service tax entry detail and the transaction will be available inService Tax Payment form.

At the time of receiving the balance payment from customer, the program will create theservice tax entry details.


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Service Tax Opening in case of Interim (Sales Credit Memo)

Enter the opening balance of service tax in case of sales credit memo.

Initially enter the opening balance of customer (Credit memo) including service taxamount.

In Service Tax Opening form select the type as “Sale” and select the transaction fromthe lookup list.

After clicking the assist button, Customer Ledger Entry window opens in which you canselect the transaction for which you want to update the opening balances of service tax.


Type: Sale Transaction No.: 331 (Selected from customer ledger entry) Posting Date: 31/03/07 Document Type: credit memo Document No.: G00071 Party Code: 10000 Service Tax Group Code: Adv.Service Tax Registration No.: BJX118910100578 Service Tax Base Amount: 5000 Service Tax Amount: 600

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eCess Amount: 12 Payable/Receivable Amount: - 5612 Service Tax %: 12 Service tax eCess %: 2 ST. Rec./Pay. (Interim)A/C: 5925 Bal. Account Type (Interim): G/L Account Bal. Account No. (Interim): 5925




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G/L Entry


Particulars Type Amount(Rs)Service Tax Payable Interim

A/CDR 612

To, Service Tax Payable Interim A/C

CR 612

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Service Tax Entry

The program will update service tax entry for the posted transaction with service taxregistration number and other details. Document type will be credit memo and values willbe in positive.

At the time of making refund to customer from Navision, journals applying with customer entry system will create the service tax entry detail.

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Service Tax Opening in case of Interim & Payable (Sales credit

memo & Refund) Enter the opening balance in case of customer sales credit memo and the partialpayment has been refunded to the customer and service tax has been calculated at thetime of creating credit memo.

Initially enter the opening balance of customer including service tax amount. Also enter the refund that have been paid to the customer and apply both entries before enteringthe opening balances of service tax.

In Service Tax Opening form, select the type as “Sale” and select the transaction fromthe lookup list.

After clicking the assist button, Customer Ledger Entry window opens, in which you canselect the transaction for which you want to update the opening balances of service tax.

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Type: Sale Transaction No.: 333 (Selected from customer ledger entry) Posting Date: 31/03/07 Document Type: credit memo Document No.: G00072 Party Code: 10000 Service Tax Group Code: Adv.Service Tax Registration No.: BJX118910100578 Service Tax Base Amount: 5000 Service Tax Amount: 600 eCess Amount: 12 Payable/Receivable amount: - 5612 Service Tax %: 12 Service tax eCess %: 2 ST. Rec./Pay. (Interim)A/C: 5925 Bal. Account Type (Interim): G/L Account Bal. Account No. (Interim): 5925 ST. Rec/Pay Account : 5923 Amount Received/Paid : 2000 Remaining Amount : 0 (Only applicable in purchase transaction)Remaining eCess Amount : 0 (Only applicable in purchase transaction)Bal. Account Type : G/L Account Bal. Account No .: 5923


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G/L Entry

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Particulars Type Amount(Rs)Service Tax payable Interim

A/CDR 612

To, Service Tax payable Interim A/C CR 612

Service Tax payable DR 218.11Service Tax payable CR 218.11

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Service Tax Entry



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The program will create service tax entry detail with positive values and document type

will be refunded.

At the time of making balance payment (refund) to the customer, the program will createthe service tax entry details.


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Service Tax Opening in case of Full Payment is Received from the Customer and the Customer Invoice is closed.

In case full payment is received from the customer and the customer invoice is closed,you can directly enter the opening balances of service tax and there is no need to create

the customer balances.




Type: Sale Transaction No.: Blank Posting Date: 31/03/07

Document Type: Payment Document No.: Op002 Party Code: Blank or you can give the party code. Service Tax Group Code: Adv.Service Tax Registration No.: BJX118910100578 Service Tax Base Amount: -200000 Service Tax Amount: -24000 eCess Amount: -480 Payable/Receivable Amount: 224480

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Service Tax %: 12 Service Tax eCess %: 2 ST. Rec./Pay. (Interim)A/C: 5925 Bal. Account Type (Interim): G/L Account Bal. Account No. (Interim): 5925 ST. Rec/Pay Account : 5923 Amount Received/Paid : -224480 Remaining Amount : 0 (Only applicable in case of purchase transaction)Remaining eCess Amount : 0 (Only applicable in case of purchase transaction)Bal. Account Type : G/L Account Bal. Account No .: 5923




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G/L Entry


Particulars Type Amount(Rs)Service Tax Payable DR 24480Service Tax Payable CR 24480

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Service Tax Entry



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The program will create service tax entry detail with negative values. Document type willbe payment and the service tax amount will be available for payment in the Service TaxPayment form.

Note: You can also enter the opening balances of document type as “Refund” in case allcredit notes are closed.

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Service Tax Opening Balance in case of Advance Payment & Refund

Service Tax in case of Advance Payment is Paid to the Vendor

In case advance payment is paid to the vendor, user has to update the opening balanceof vendor with a check mark in Serv. Tax on Advance Payment field in Vendor Ledger Entry.



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Type: Purchase Transaction No.: 354 (Select from vendor ledger entry) Posting Date: 31/03/07 Service Tax on Adv. Payment: True Document Type: Payment Document No.: 3427 Party Code: 10000. Service Tax Group Code: Adv.Service Tax registration No.: BJX118910100578 Service Tax Base Amount: 10000 Service Tax Amount: 1200 eCess Amount: 24 Payable/Receivable amount: 11224 Service Tax %: 12 Service Tax eCess %: 2 ST. Rec./Pay. (Interim)A/C: 5926 Bal. Account Type (Interim): G/L Account Bal. Account No. (Interim): 5926 ST. Rec/Pay Account : 2998 Amount Received/Paid : 0 Remaining Amount : 0 Remaining eCess Amount : 0 Remaining Service Tax Amount: 1200 Remaining ST ECess Amount: 24 Remaining ST Base Amount: 10000 Bal. Account Type : G/L Account Bal. Account No .: 2998


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Navigation:

Financial Management → General Ledger → History → Navigate

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G/L Entry


Particulars Type Amount(Rs)Service Tax Receivable Interim DR 1224Service Tax Receivable Interim CR 1224

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Service Tax Entry

The program will create the service tax entry with a check mark in the Serv. Tax on Advance Payment field and also will update the Remaining Serv. Tax Amount field,Remaining Serv. Tax eCess Amount field and Remaining Serv. Tax Base Amount fieldwith values.


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Service Tax in case of Refund Payment Paid; is Received from Vendor against Advance Payment.

In case refund payment paid; is received from the vendor against advance payment thenyou have to update the opening balance of vendor with a check mark in the Serv. Tax Advance Payment field of the Vendor Ledger Entry window.



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Type: Purchase Transaction No.: 356 (Select from vendor ledger entry) Posting Date: 31/03/07 Service Tax on Adv. Payment: True Document Type: Refund Document No.: 3428 Party Code: 10000. Service Tax Group Code: Adv.Service Tax Registration No.: BJX118910100578 Service Tax Base Amount: - 10000 Service Tax Amount: - 1200 eCess Amount: - 24 Payable/Receivable Amount: - 11224 Service Tax %: 12 Service Tax eCess %: 2 ST. Rec./Pay. (Interim)A/C: 5926 Bal. Account Type (Interim): G/L Account Bal. Account No. (Interim): 5926 ST. Rec/Pay Account : 2998 Amount Received/Paid : 0 Remaining Amount : 0 Remaining eCess Amount : 0 Remaining Service Tax Amount: - 1200 Remaining ST ECess Amount: - 24 Remaining ST Base Amount: - 10000 Bal. Account Type : G/L Account Bal. Account No .: 2998


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G/L Entry

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Particulars Type Amount(Rs)Service Tax Receivable Interim DR 1224Service Tax Receivable Interim CR 1224

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Service Tax Entry



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Service tax in case of Advance payment received from Customer

In case advance payment is received from the customer, you have to update theopening balance of customer with a check mark in the Serv. Tax on Advance Payment

field of the Customer Ledger Entry window.Service Tax Opening form


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Type: Sale Transaction No.: 358 (Select from customer ledger entry) Posting Date: 31/03/07 Service Tax on Adv. Payment: True Document Type: Payment Document No.: 3429 Party Code: 10000. Service Tax Group Code: Adv.Service Tax Registration No.: BJX118910100578 Service Tax Base Amount: - 10000 Service Tax Amount: - 1200 eCess Amount: - 24 Payable/Receivable Amount: - 11224 Service Tax %: 12 Service Tax eCess %: 2 ST. Rec./Pay. (Interim)A/C: 5925 Bal. Account Type (Interim): G/L Account Bal. Account No. (Interim): 5925 ST. Rec/Pay Account : 5923 Amount Received/Paid : 0 Remaining Amount : 0 Remaining eCess Amount : 0 Remaining Service Tax Amount: - 1200 Remaining ST ECess Amount: - 24 Remaining ST Base Amount: - 10000 Bal. Account Type : G/L Account Bal. Account No .: 5923


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G/L Entry

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Service Tax Entry

The program will create the service tax entry with a check mark in the Serv. Tax on Advance Payment field and also will update the Remaining Serv. Tax Amount field,Remaining Serv. Tax eCess Amount field and Remaining Serv. Tax Base Amount fieldwith values

You can view the service tax entry detail by clicking the assist button in AmountReceived/Paid field in the Service Tax Entry window.

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The program will create the service tax entry detail and the amount of service tax andecess will be available for payment.


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Service tax in case of Refund payment made to the customer against advance payment.

In case refund payment is made to the customer against advance payment then you

have to update the opening balance of customer with a check mark in the Serv. Tax Advance Payment field of the Customer Ledger Entry window.



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Type: Sale Transaction No.: 360 (Select from customer ledger entry) Posting Date: 31/03/07 Service Tax on Adv. Payment: True Document Type: Refund Document No.: 3430 Party Code: 10000. Service Tax Group Code: Adv.Service Tax Registration No.: BJX118910100578 Service Tax Base Amount: 10000 Service Tax Amount: 1200 eCess Amount: 24 Payable/Receivable Amount: 11224 Service Tax %: 12 Service Tax eCess %: 2 ST. Rec./Pay. (Interim)A/C: 5925 Bal. Account Type (Interim): G/L Account Bal. Account No. (Interim): 5925 ST. Rec/Pay Account : 5923 Amount Received/Paid : 0 Remaining Amount : 0 Remaining eCess Amount : 0 Remaining Service Tax Amount: 1200 Remaining ST ECess Amount: 24 Remaining ST Base Amount: 10000 Bal. Account Type : G/L Account Bal. Account No .: 5923


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G/L Entry

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Particulars Type Amount(Rs)Service Tax Payable Interim DR 1224Service Tax Payable Interim CR 1224Service Tax Payable DR 1224Service Tax Payable CR` 1224

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Service Tax Entry


You can view the service tax entry detail by clicking the assist button in AmountReceived/Paid field of the Service Tax Entry window.

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The program will create the service tax entry detail. The amount of service tax and ecesswill be available for the adjustment in Service Tax Payment form.

Note: Second option to enter the opening balances in case of advance paymentreceived from customer or paid to vendor, you can also use General Journal, Cashreceipt/payment voucher, Bank receipt/payment voucher, payment journal or cash

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receipt journal by making a transaction for vendor/customer with Serv. Tax on Advancepayment field true and calculate service tax in the transaction itself. System will createvendor/customer ledger entries and also service tax entry and service tax entry details.You will need to keep same account in interim receivable/payable account in service taxsetup.


Adjustments

Positive Adjustment in Quantities

Positive adjustment in Quantities (increase in the quantity) andreflected in RG 23 A Part I.


To do the positive adjustment of quantity (Raw Material) and RG 23 A Part I to beaffected fill the fields in Item Journal window as follows:

Posting Date : 10/11/07 Entry Type : Positive Adjustment Document No. : T00055 Item No. : 1000 Description : Bicycle Location : Blue Quantity : 10 Unit of Measurement : Pcs Unit Amount : 350.595

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Excise Entry : True Amount : 3505.95




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Posting date : 10/11/07 Description : Bicycle Base Unit of Measure : Pcs.Quantity Received : 10 Closing Stock : 145 Location Code : Blue Location ECC No. : BXBVS7543890 Item No. : 1000 Document No. : T00055 Type : Purchase Quantity : 10 Opening Stock : 135

The program will update the closing stock as the quantity has been increased.Item Ledger Entry will also get affected with the entry type “Positive Adjustment”.

Positive adjustment in Quantities (increase in the quantity) andreflected in RG 23 C Part I.


To do the positive adjustment of quantity (Capital Item) and RG 23 C Part I to beaffected, fill the fields in the Item Journal window as follows:.

Posting Date : 10/11/07 Entry Type : Positive Adjustment Document No. : T00057 Item No. : 1001 (Capital Item) Description : Touring Bicycle Location : Blue Quantity : 10 Unit of Measurement : Pcs Unit Amount : 350.595 Excise Entry : True

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Amount : 3505.95




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Posting date : 10/11/07 Description : Touring Bicycle Base Unit of Measure : Pcs.Quantity Received : 10 Closing Stock : 250 Location Code : Blue Location ECC No. : BXBVS7543890 FA/Item No. : 1001 Document No. : T00057 Type : Purchase Quantity : 10 Opening Stock : 240 Product Type : Item

The program will update the closing stock as the quantity has been increased.

Item Ledger Entry will also get affected with the entry type “Positive Adjustment”.

Negative Adjustment in Quantities

Negative adjustment in Quantities (Decrease in the quantity) andreflected in RG 23 A Part I.


To do the negative adjustment of quantity (Raw Material) and RG 23 A Part I to beaffected, fill the fields in the Item Journal window as follows:.

Posting Date : 10/11/07 Entry Type : Negative Adjustment Document No. : T00056

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Item No. : 1000 Description : Bicycle Location : Blue Quantity : 5 Unit of Measurement : Pcs Unit Amount : 350.595 Excise Entry : True Amount : 1752.98




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Posting date : 10/11/07 Description : Bicycle Base Unit of Measure : Pcs.Quantity Sold : 5 Closing Stock : 140 Location Code : Blue Location ECC No. : BXBVS7543890 Item No. : 1000 Document No. : T00056 Type : Sale Quantity : -5 Opening Stock : 145

Quantity field will get affected with (-) sign and the closing stock will be decreased.

Item Ledger Entry will also get affected with the entry type “Negative Adjustment”.

Negative adjustment in Quantities (Decrease in the quantity) andreflected in RG 23 C Part I.


To do the negative adjustment of quantity (Capital Item) and RG 23 C Part I to beaffected, fill the fields in the Item Journal window as follows:.Posting Date : 10/11/07 Entry Type : Negative Adjustment Document No. : T00058 Item No. : 1001 (Capital Item) Description : Touring Bicycle Location : Blue Quantity : 5 Unit of Measurement : Pcs Unit Amount : 350.595 Excise Entry : True

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Amount : 1752.98




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Posting date : 10/11/07 Description : Touring Bicycle Base Unit of Measure : Pcs.Quantity Sold : 5 Closing Stock : 245 Location Code : Blue Location ECC No. : BXBVS7543890 FA No./Item No. : 1001 Document No. : T00058 Type : Sale Quantity : -5 Opening Stock : 250 Product Type: Item

Quantity field will get affected with (-) sign and the closing stock will be decreased.Item Ledger Entry will also get affected with the entry type “Negative Adjustment”.

Positive Adjustment related to RG 23 A Part II entries


To do the Positive adjustment in RG 23 A Part II , fill the fields in the Item Journalwindow as follows:.

Posting Date : 10/11/07 Document No. : G00045 Account No. : 2993 E.C.C. No. : BXBVS7543890 Description : Cenvat Cr. Receivable Account Excise Charge : True Excise Record : RG 23 ABED Amount : 5000 Amount : 5000

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Bal. Account Type : G/L Account Bal. Account No. : 9370 (Adjustment in RG 23 A/C Part II)




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G/L Entry

The program creates the following entry


AccountDR 5000

To, Adjustment in RG 23 A/CPart II

CR 5000

The program has debited CENVAT Cr. Receivable Account and credited Adjustment inRG 23 A/C part II Account.

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The program will update RG 23 A Part II with BED Credit amount and Location ECC No.will also flow.

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Note: User can also do the positive adjustment for Secondary and higher educationCESS (SHE CESS)

Negative Adjustment related to RG 23 A Part II entries


To do the Negative adjustment in RG 23 A Part II fill the fields in the GeneralJournal window as follows:.


Document Type: Credit Memo Document No. : G00046 Account No. : 2993 E.C.C. No. : BXBVS7543890 Description : Cenvat Cr. Receivable Account Excise Charge : True Excise Record : RG 23 ABED Amount : -2 000 Amount : -2 000 Bal. Account Type : G/L Account Bal. Account No. : 9370 (Adjustment in RG 23 A/C Part II)


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G/L Entry

The program creates the following entry :

Particulars Type Amount(Rs)

Cenvat Cr. Receivable Account CR 2000To, Adjustment in RG 23 A/C PartII

DR 2000

The program has credited CENVAT Cr. Receivable Account and debited Adjustment inRG 23 A/C part II Account.

Note: In case of negative adjustment in RG 23 A Part II, document type should be“Credit Memo” in the General Journal.

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The program will update RG 23 A Part II with BED Debit amount and Location ECC No.will also flow.

Note: User can also do the negative adjustment for Secondary and higher educationCESS (SHE CESS)

Positive Adjustment related to RG 23 C Part II entries


To do the Positive adjustment in RG 23 C Part II , fill the fields in the GeneralJournal window as follows:

Posting Date : 10/11/07 Document No. : G00047 Account No. : 2993 E.C.C. No. : BXBVS7543890 Description : Cenvat Cr. Receivable Account Excise Charge : True Excise Record : RG 23 C BED Amount : 10000 Amount : 10000 Bal. Account Type : G/L Account Bal. Account No. : 9370 (Adjustment in RG 23 A/C Part II)


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G/L Entry



AccountDR 10000

To, Adjustment in RG 23 A/C Part II

CR 10000

The program has debited CENVAT Cr. Receivable Account and credited Adjustment inRG 23 A/C part II Account.

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The program will update RG 23 C Part II with BED Credit amount and Location ECC No.will also flow.

Note: User can also do the positive adjustment for Secondary and higher educationCESS (SHE CESS)

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Negative Adjustment related to RG 23 C Part II entries


To do the Negative adjustment in RG 23 C Part II, fill the fields in the GeneralJournal window as follows:

Posting Date : 10/11/07 Document Type: Credit Memo Document No. : G00050 Account No. : 2993 E.C.C. No. : BXBVS7543890 Description : Cenvat Cr. Receivable Account Excise Charge : True Excise Record : RG 23 C

BED Amount : -5000 Amount : -5000 Bal. Account Type : G/L Account Bal. Account No. : 9370 (Adjustment in RG 23 A/C Part II)


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G/L Entry



AccountCR 5000

To, Adjustment in RG 23 A/CPart II

DR 5000

The program has credited CENVAT Cr. Receivable Account and debited Adjustment inRG 23 A/C part II Account.

Note: In case of Negative adjustment in RG 23 C Part II, document type should be“Credit Memo” in the General Journal.

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RG 23 C part II Entry

The program will update RG 23 C Part II with BED Debit amount and Location ECC No.will also flow.

Note: User can also do the negative adjustment for Secondary and higher educationCESS (SHE CESS)

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Positive Adjustment related to DSA

Navigation:

Purchase → Inventory & Costing → Item Journal

To do the Positive adjustment in DSA, fill the fields in the Item Journal window asfollows:.

Posting Date : 18/01/07 Entry Type : Positive Adjustment Document No. : T00064 Item No. : 70062 ( In Item Card Replenishment, the Replenishment

system should be Prod. Order)



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Generate DSA to populate the Quantity in the DSA.





Location Code: Blue (Select from lookup list)Date: 18/01/07 (Enter the date in which you have posted the

Item Journal)Click OK

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DSA Entry

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Posting date : 18/01/07 Item No. : 70062 Opening Stock: 100 Closing Balance : 110 Location Code : Blue Other Quantity : 10

Other Quantity field has been updated with value 10 as positive adjustment has beendone through the Item Journal.

If you run the DSA report, Opening Balance field will show the value as 100, Other Qtyfield will show the value as 10 and Closing Balance field will show the value as 110.

Negative Adjustment related to DSA


Enter the following information to do the Negative adjustment in DSA.

Posting Date : 19/01/07 Entry Type : Negative Adjustment Document No. : T00065 Item No. : 70062 (In Item Card Replenishment The program should

be prod. Order)



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Generate DSA to populate the Quantity in the DSA.





Location Code: Blue (Select from lookup list)Date: 19/01/07 (Enter the date in which you have posted the

Item Journal)Click Ok

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DSA Entry

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Posting date : 19/01/07 Item No. : 70062 Opening Stock: 110 Closing Balance : 105 Location Code : Blue Other Quantity : -5

Other Quantity field has been updated with value as -5, as negative adjustment hasbeen done through Item Journal.

If you run the DSA report, Opening Balance field will show the value as 110, Other Qtyfield will show the value as -5, and Closing Balance field will show the value as 105.

VAT Adjustments

Note: For VAT Adjustments please refer the 13702(13705) _VAT Credit on CapitalGoods, Setoff and Refund (User Guide)

Service Tax Adjustments

Service tax adjustments can be handled in case of increase or decrease of service taxand eCess percentages of posted Purchase Invoice/credit memo, Sale Invoice/creditmemo and Payment/refund.

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Setup for Service Tax Adjustment

Navigation:Financial Management → General Ledger → Setup → Trial Codes → SourceCode Setup

Select the source code from lookup list in the Service Tax Opening field and in theService tax adjustment field.

Service Tax Batches

Navigation:Financial Management → Setup → Service Tax → Service Tax Batches

Before entering the opening balances of service tax, you must create batch throughService Tax Batches window.

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Create the service tax batches by entering the following fields:

Fields Description

Journal Batch Name Enter the code of the batch, you want tocreate (For example: Opening)

Description Enter the description of the code you haveentered.

Type Select the type from the down button. Theavailable options are: Opening and

Adjustment.

Source code Select the source code from lookup list inthis field.

Service Tax Adjustment form

Navigation:Financial Management → General Ledger → Periodic Activity → Service Tax → Service Tax Adjustment

New Interface has been provided to handle the adjustments related to service taxentries.

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Fill in the fields according to these guidelines

Fields Description

Apply ST Entry No. Select the service tax entry number fromthe lookup list for which posted transactionyou want to make adjustments.

Type The program will automatically flow thetype after selecting the service tax entrynumber. The available options are: Salesand Purchase.

Posting date The program will show the posting date of the selected transaction. This field iseditable.

Document No. The program will show the documentnumber of the selected transaction. Thisfield is editable

External Document No. Enter the external document number in thisfield, in case of purchase type transaction.

Party Code This field will show the party code of theselected transaction.

Service tax group code The program will show the service taxgroup of selected transaction.

Service tax registration No. The program will show the service taxregistration number of selectedtransaction.

Applied Document Type The program will show the applieddocument type of the selected transaction.

Applied Document No. The program will show the applieddocument number of the selectedtransaction.

Applied Posting DateThe program will show the applied postingdate of the selected transaction.

Applied ST Base Amount The program will show the applied servicetax base amount of the selectedtransaction.

Applied Service Tax Amount The program will show the applied servicetax amount of the selected transaction.

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Fields Description Applied eCess amount The program will show the applied eCess

amount of the selected transaction.

Applied Service Tax % The program will show the applied servicetax % of the selected transaction.

Applied Service Tax eCess % The program will show the applied servicetax eCess % of the selected transaction.

New Service Tax % Enter the new service tax % in this field.

New Service Tax eCess % Enter the new service tax eCess % in thisfield.

Diff Service Tax Amount The program will show the difference of service tax amount which arrives after entering the new service tax %.

Diff eCess Amount The program will show the diff of eCessamount which arrives after entering thenew service tax eCess %

ST. Rec./Pay. Account (Interim) The program will show the Interim accountafter selecting the transaction.

Bal. Account Type (Interim) This field shows the type of Balanceaccount (Interim).

Bal. Account No. (Interim) This field shows the Balance accountnumber (Interim).

Bal. Account Type This field shows the Balance account typeof the transaction.

Bal. Account No. This field shows the Balance accountnumber of the transaction.

Note: You can post the transactions with available dimensions in the form on Line menubutton.

Adjustment in case of Posted Purchase Invoice.

Initially there should be some posted purchase invoice with service tax calculation .

Service Tax Adjustment form

Navigation:

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Financial Management → General Ledger → Periodic Activity → Service Tax → Service Tax Adjustment

Click the Applied ST Entry No. field to select the service tax entry. Service tax entrywindow opens in which you can the select the entry.

Click OK.

The transaction that is selected was posted with services % 10 and eCess % 1, now youhave to make service tax % as 12 and eCess % as 2.

Enter the following fields in the service tax adjustment form.

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Applied ST Entry No: 52 (Selected from service tax entry)Type: Purchase Posting Date: 01/04/07 Document No.: 3432AExternal Document No. : ADJ004 Party Code: 10000. Service Tax Group Code: Adv.Service Tax Registration No.: HXJ118910111357 Service Tax Base Amount: 10000 Applied Document Type : Invoice Applied Document No. : G00089 Applied Posting Date : 01/04/07 Applied ST Base Amount : 10000 Applied Service Tax Amount : 1000 Applied eCess Amount : 10 Applied Service Tax %: 10 Applied Service Tax eCess % : 1New Service Tax % : 12 (New %)New Service Tax eCess % : 2 (New%)Diff Service Tax Amount : 200 Diff Service Tax eCess Amount : 14 ST. Rec./Pay. Account (Interim) : 5926 Bal. Account Type (Interim) : Vendor Bal. Account No. (Interim) : 10000 Bal. Account Type : G/L Account Bal. Account No. : 2998

Post the Service tax Adjustment Journal.

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G/L Entry

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Particulars Type Amount(Rs)Service Tax Receivable Interim DR 214Vendor CR 214

The program has created the GL entry with difference amount of service tax and eCess.

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Service Tax Entry

The program will also create the new service tax entry with a check mark in the Adjustedfield.

Note 1: The user can also do the adjustment where he wants to decrease the servicetax and eCess % and the same can be done for Purchase credit memo. The programwill create the GL entries and service tax entry accordingly.

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Note 2: The user can also do the multiple adjustments, in this case system will give theconfirmation message and the original entry will be updated with the previousadjustments.

Note: User can also do the adjustments for Secondary and higher education CESS(SHE CESS)

Adjustment in case of Posted Sales Invoice.

Initially there should be some posted sales invoice with service tax calculation.

Service tax Adjustment form


Click the Applied ST entry No. field to select the service tax entry. Service tax entrywindow opens, in which you can select the entry.

Click OK.

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The transaction that is selected is posted with services % 10 and eCess % 1, now youhave to make service tax % as 12 and eCess % as 2.

Enter the following fields in the service tax adjustment form.

Applied ST entry No: 54 (Selected from service tax entry)Type: Sale Posting Date: 01/04/07 Document No.: 3433AExternal Document No. : ADJ003 Party Code: 10000. Service Tax Group Code: Adv.Service Tax Registration No.: HXJ118910111357 Service Tax Base amount: 10000 Applied Document Type : Invoice Applied Document No. : G00090 Applied Posting Date : 01/04/07 Applied ST Base Amount : -10000 Applied Service Tax Amount : -1000 Applied eCess Amount : -10 Applied Service Tax %: 10 Applied Service Tax eCess % : 1New Service Tax % : 12 (New %)New Service Tax eCess % : 2 (New%)Diff Service Tax Amount : -200 Diff Service Tax eCess Amount : -14 ST. Rec./Pay. Account (Interim) : 5925 Bal. Account Type (Interim) : Customer Bal. Account No. (Interim) : 10000 Bal. Account Type : G/L Account Bal. Account No. : 5923



Navigation:

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Financial Management → General Ledger → History → Navigate

G/L Entry


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Service Tax Payable Interim CR 214Customer DR 214

The program has created the GL entry with difference amount of service tax and eCess.

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Service Tax Entry


Note 1: User can also do the adjustment where he wants to decrease the service taxand eCess % and the same can be done for Sales credit memo. The program will createthe GL entries and service tax entry accordingly.

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Note 2: User can also do the multiple adjustments, in this case the program will give theconfirmation message and the original entry will be updated with the previousadjustments.

Note 3: User can also do the adjustments for the posted transactions where servicesaccount is debited and cash or bank is credited or services account is credited and cashor bank is debited.

Note 4: If the Purchase Invoice and Sale Invoice have been utilized fully or partially(taken for credit or payment of service tax) then no adjustment is allowed.

Note: User can also do the adjustments for Secondary and higher education CESS(SHE CESS)

Appendix

Opening Tax Entries

The existing balances in the tax records (means Central Excise and Service tax)should be posted into the Tax Records as opening balance.

Central Excise


a. RG 23 A/C Part I (opening quantity particulars).b. DSA (opening quantity particulars).

c. PLA (opening balance and components like BED, e-Cess, andso on).d. RG 23A/C Part II (opening balance of CENVAT credit and the

components like BED, e-Cess, and so on).e. Cenvat Credit Deferred (opening balance of CENVAT credit

and the components like BED, e-Cess, and so on).

All the above should be recorded location wise with relevant location details like E.C.C No.

For example:

X Ltd. has a opening balance of 10 units with a Cenvat Credit Rs10000 (Components: BED Rs 9000 and e-Cess Rs1000), PLA withRs 5000 (Components: BED Rs 4500 and e-Cess Rs 500), Finishedgoods stock with 10 units and Cenvat Credit Deferred pertaining to 2units of capital assets which were Installed on 12-10-2005 is Rs 6000(Components: BED Rs 5800 and e-Cess Rs 200).

• The RG 23A Part I should be updated with openingquantity of 10 units

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• PLA should be updated with the opening balance of Rs

5000, the components BED Rs 4500 and e-Cess Rs 500should also be updated

• DSA should be updated with opening quantity of 10 units

• RG 23 A part II should be updated with opening balance of Rs 10000, the components BED Rs 9000 and e-CessRs1000 should also be updated

• CENVAT Credit Deferred should be updated with openingbalance of Rs 6000. The components: BED Rs 5800 ande-Cess Rs 200 should also be updated along with theentry in RG 23C Part I for 2 units, the date of Installation (12-10-2005) should also be updated.

• Service Tax


a. Opening balance of the service tax credit carried forward withthe details of the period from which the balance is carriedforward and the components like service tax and e-Cess.

b. Opening balance of the service tax credit with details of components like service tax and e-Cess

c. Opening balance of the service tax payable with details of components like service tax and e-Cess

d. Opening balance of the service tax receivable with details of components like service tax and e-Cess.

All the above should be recorded location wise with relevant location details like Service Tax Registration No.

For example:

X Ltd. has opening balances as:

I. Service tax credit carried forward Rs 1000 pertaining to theperiod ending on 1-4-2006 with components: Service Tax asRs 800 and e-Cess as 200

II. Service tax credit of the period Rs 5000 with components asService Tax Rs 4500 and e-Cess 500.

III. Service tax payable of Rs 6000 with components as ServiceTax Rs 5600 and e-Cess 400

IV. Balance receivable for the service tax of Rs 1200 withcomponents as Service Tax Rs 900 and e-Cess 300

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• Service tax credit carried forward should be updated withRs 1000 with the details of the carried forward from periodending 1-4-2006, Service Tax Rs 800 and e-Cess Rs 200.

• Service tax credit for the period should be updated with Rs5000 with particulars of Service Tax Rs 4500 and e-Cess500.

• Service tax of for the period should be updated with Rs6000 with particulars of Service Tax Rs 5600 and e-CessRs 400

• Service tax receivable should be updated with Rs 1200with particulars of Service tax Rs 900 and e-Cess Rs 300

Adjustment of Tax Entries

Option for the correction / modification / rectification / adjustment in the taxrecords (Central excise, Sales tax & VAT, Service tax) components of the taxrecords against any GL account and posting into respective tax records shouldbe available.

The reason of the correction / modification / rectification / adjustment may arisedue to occurrence of any internal or external event. Internal event may bewastage, scraped mistakes and external event may be change in price or changes in provisions of the respective act.

There are three types of adjustments as: positive adjustment, negativeadjustment, and correction adjustment.

Positive Adjustment: A positive adjustment is the increase in the taxliability, increase in the indirect tax due to increase in sale price or increase in the tax rate.For example:X Ltd. has initially charged its customer Y, service tax of Rs 200 @ 20%,the rate got changed to 22% before the receipt of the amount.

The original entry was:Service tax receivable A/C Dr 200Customer Y A/C Cr 200

Now the adjustment entry will be:Service Tax receivable A/C Dr 20Customer Y A/C Cr 20

In this case there should be provision to post the GL accounts ServiceTax Receivable A/C and Customer A/C with Rs 20 along with tax records& tax components.

Negative Adjustment: A negative adjustment is the decrease in the taxliability like decrease in the indirect tax due to decrease in sale price or decrease in the tax rate.

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For example:X Ltd. has initially charged its customer Y service tax of Rs 200 @ 20%,the rate got changed to 15% before the receipt of the amount.

The original entry was:Service Tax Receivable A/C Dr 200Customer Y A/C Cr 200

Now the adjustment entry will be:Customer Y A/C Dr 50Service Tax Receivable A/C Cr 50

In this case there should be provision to post the GL accounts ServiceTax Receivable A/C and Customer A/C with Rs 50 along with tax records& tax components.

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Microsoft ® Business Solutions–Navision ® 4.0- Voucher Interface

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Table of Contents

Overview of Funct ionalit y....................................................................................3 Detailed Setup...................................................................................................3

Comprehensive Functionality............................................................................4

Reports ..............................................................................................................4 Set ups- Voucher Inte rf ace....................................................................................5

No. Series ..........................................................................................................6 Company Informat ion........................................................................................6 Location Card..................................................................................................11 Source Codes ...................................................................................................17 Source Code Setup ..........................................................................................17 General Journal Templat es.............................................................................19 St andard Text Codes .......................................................................................21 General ledger Set up ......................................................................................21

Transactions........................................................................................................23

Cash Recei pt Voucher .....................................................................................23 Viewi ng the Ledger Entries..........................................................................27

Cash Payment Voucher ....................................................................................33 Viewi ng the Ledger Entries..........................................................................37

Bank Receipt Voucher .....................................................................................41 Viewi ng the Ledger Entries..........................................................................45

Bank Payment Voucher ...................................................................................51 Viewi ng the Ledger Entries..........................................................................55

Cont ra Voucher ...............................................................................................61 Viewi ng the Ledger Entries..........................................................................65

Journal Voucher ..............................................................................................71 Viewi ng the Ledger Entries..........................................................................75 Reports................................................................................................................80

Day Book..........................................................................................................81 Cash Book ........................................................................................................86 Bank Book........................................................................................................89 Ledgers............................................................................................................91 Voucher Register .............................................................................................94

Appendix.............................................................................................................98

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Overview of FunctionalityVoucher Interface functionality covers the Indian Business scenario comprehensively.The functionality is a standard solution for the companies who are recording thetransactions like Cash, Bank, and Journals.

Following are the vouchers needed to record the transactions like Cash, Bank, andJournals for this functionality:

Cash Receipt Voucher: Entries which affect the Cash accounts while receiving cashpayments from Customers.

Cash Payment Voucher: Entries which affect the Cash accounts while making cashpayments to Vendors.

Bank Receipt Voucher: Entries which affect the Bank accounts while receivingpayments from Customers.

Bank Payment Voucher: Entries which affect the Bank accounts while makingpayments to Vendors.

Contra Voucher: Entries which affect the Cash and Bank Account together are termedas Contra Vouchers. For example, withdrawal from bank is one such transaction.

Journal Voucher: Entries which are affecting neither the Cash Account nor the Bankaccount are termed as Journal Vouchers.

Facility provided to enter the Cheque Number and Cheque Date in Bank Receipt, BankPayment and Contra Vouchers.

Detailed Setup Voucher Interface functionality contains a detailed setup, which is used to maintain thedifferent types of vouchers and no. series location-wise.

Setup Area Description

No. Series Define different No. Series for different type of vouchers and for different locations.

Company InformationIf the company is not using Location granule then mapNo. series with different type of voucher; also, withthat voucher you can map the G/L account and Bank

Account.

Location CardDefine No. Series with different types of vouchers andselect the G/L account and Bank account withparticular voucher.

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Source Codes On Company Initializing, Source codes will beinserted automatically.

Source Code Setup System will automatically assign Source code withdifferent type of voucher.

General Journal TemplatesSystem will automatically creates Journal template for different type of vouchers and define the batches withSub-Type.

Standard Text CodesDefine Standard Text codes which will available at thetime of entering Narrations.

General Ledger Setup Place a check mark in Activate Cheque No. field.


The Voucher Interface functionality covers the following points:

• Different types of vouchers like Cash Receipt, Cash Payment, Bank Receipt,Bank Payment, Contra and Journal.

• Facility for recording the transactions for different locations with different no.series.

• Separate screen for different voucher types.• Standard text selection in Narration.• Provision to enter Narration for single line or multiple lines.• Provision to enter Narration for Voucher.• Provision to view and print posted vouchers with narrations.• Provision to view and print Day Book containing all types of transactions.• Provision to view and print Cash Book and Bank Book location-wise.• Provision to view and print Control accounts with sub-ledgers details.• Provision to enter cheque number and cheque date in Bank Receipt, Bank

Payment and Contra Voucher and also cheque number and cheque date will flowin Bank Book and Posted Vouchers.

Reports The following reports are provided to solve the needs of the Indian Business scenarios:

• Posted Vouchers• Day Book• Cash Book• Bank Book• Control Accounts (Ledgers)

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• Voucher Register

Setups- Voucher Interface

Following are the areas where setup is required:• No. Series• Company Information• Location Card• Source Codes• Source Code Setup• General Journal Templates• Standard text Codes• General Ledger Setup

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No. Series

NAVIGATION :FINANCIAL MANAGEMENT → SETUP → NO . SERIES

Define No. series for each type of voucher and for each location. Further a user canselect the No. series in Company Information master and Location card.

Company Information

NAVIGATION : ADMINISTRATION → APPLICATION SETUP → GENERAL → COMPANY INFORMATION

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Click the Company menu button, select - Voucher No. Series, to define the No. series for different types of vouchers.

After selecting the option Voucher No. Series in Company menu button, a new window isopened. Here a user can define the Posting No. Series for different vouchers.

Fields Descriptions:

Fields Description

Sub Type Select the Sub Type from drop downbutton. The available options are: CashReceipt Voucher, Cash Payment Voucher,Bank Receipt Voucher, Bank PaymentVoucher, Contra Voucher and Journal

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Fields Description

Voucher.

Posting No. SeriesSelect No. Series defined in the No. Seriesfor different Sub type from the lookup list.

After assigning a Posting No. Series for all sub-types click the Voucher menu button andselect the Account option.

After selecting the Account option, a new window will open where the user can definethe accounts for different sub-types.

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Select the Account type and define Account no. for the selected Account type.

Fields Description:

Fields Description

Account Type

Select the Account type from Drop downbutton; the options available are: G/L

Account and Bank Account.If a user wants to select the Cash accountthen he or she should select G/L Accountand if a user wants to select a Bank

account then he or she should select Bank Account.

Account No.Select the Account no. from Lookup list.G/L Account No. should be selected for the

Account type.

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Select the Account No. from G/L Account List and click Ok.

In the above screen, for Account Type “G/L Account” Account No. “2910” (cash account)has been selected.

Note 1: The program will allow selection of G/L Account as Account type if the Sub Typeis Cash Receipt Voucher or Cash Payment Voucher.

Note 2: The program will allow selection of the Bank Account as Account Type if theSub Type is Bank Receipt Voucher or Bank Payment Voucher.

Note 3: The program will not allow the user to select any G/L Account in case of Contravoucher and Journal voucher. In case of a Contra voucher, a user has already selectedCash and Bank accounts in Cash Receipt/Payment voucher and Bank Receipt/Paymentvoucher. Hence, there is no need to define it again. If a user wants to make anytransaction in Imprest account through Contra Voucher then he or she has to define thesame account in Cash Receipt/Payment voucher. In Journal voucher, the program will

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not allow selection of any G/L Account as in Journal voucher, neither the cash nor thebank accounts reflect.

If a user is not using the Location Granule then the program picks the entire relatedinformation from the Company Information master.

Location Card

NAVIGATION :WAREHOUSE MANAGEMENT → SETUP → LOCATIONS

Click the Location menu button to select the Voucher No. Series so as to define thePosting No. series for different type of vouchers for Particular Locations.

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After selecting Voucher No. Series option in the Location menu button a new window is

opened where a user can define the Posting No. Series for different vouchers.

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Fields Descriptions:

Fields Description

Sub Type Select the Sub Type from the drop down button; theavailable options are: Cash Receipt Voucher, CashPayment Voucher, Bank Receipt Voucher, BankPayment Voucher, Contra Voucher and JournalVoucher.

Posting No. Series Select No. Series defined in the No. Series for differentSub type from the Lookup list.

After assigning No. Series for all Sub Types click the Voucher menu button and selectG/L Account option:

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After selecting the G/L Account option, a new window will open where the user candefine G/L Account for different Sub Types.

Select the Account type and define Account no. for the selected Account type.

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Fields Description:

Fields Description

Account Type Select the Account type from the drop down button; the

options available are: G/L Account and Bank Account.

If a user wants to select the Cash account then he or she should select G/L Account and if a user wants toselect the Bank account then he/she should select Bank

Account.

Account No. Select the Account no. from Lookup list. G/L AccountNo. should be selected for the Account type.

Select the Account No. from G/L Account List and click Ok.

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In the above screen for Account Type “Bank Account”, Account No “GIRO” (bankaccount) has been selected.

Note 1: The program will allow selecting the G/L Account as Account type if the SubType is Cash Receipt Voucher or Cash Payment Voucher.

Note 2: The program will allow selecting the Bank Account as Account Type if the SubType is Bank Receipt Voucher or Bank Payment Voucher.

Note 3: The program will not allow a user to select any G/L Account in case of Contravoucher and Journal voucher. In case of Contra voucher, a user has already selectedCash and Bank accounts in Cash Receipt/Payment Voucher and Bank Receipt/PaymentVoucher so there is no need to define it again. If the user wants to make any transactionin Imprest account through Contra Voucher then he or she has to define the sameaccount in Cash Receipt/Payment Voucher. In Journal Voucher, the program will notallow selection of any G/L Account as in the Journal voucher neither the cash nor bankaccounts will reflect.

If a User is not using Location Granule then the entire related information has to bementioned in the Company Information master.

A User can define different types of Vouchers for different Locations with different No.Series.

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Source Codes

NAVIGATION :FINANCIAL MANAGEMENT → SETUP → TRIAL CODES → SOURCE CODES

On Company Initializing, Source Codes will be inserted automatically.

Fields Description:

Fields DescriptionCode Enter the Code for different type of vouchers like:

BANKPYMT.

Description Enter the Description of the defined Code.

Source Code Setup

NAVIGATION :FINANCIAL MANAGEMENT → SETUP → TRIAL CODES → SOURCE CODE SETUP

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System will automatically assign the source code with different type of Vouchers.

On General Tab

Attach the following fields with Source codes:

Fields Source Codes

Cash Receipt Voucher Select CASHRCPT from lookup list.

Cash Payment Voucher Select CASHPYMT from lookup list.

Contra Voucher Select CONTRAVOU from lookup list.

Bank Receipt Voucher Select BANKRCPT from lookup list.

Bank Payment Voucher Select BANKPYMT from look list.

Journal Voucher Select JOURNALVOUC from lookup list.

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General Journal Templates

NAVIGATION :FINANCIAL MANAGEMENT → SETUP → GENERAL → JOURNAL TEMPLATES

The system will automatically create the Journal templates for different vouchers andalso select the Sub Type for each template.

In the Sub Type field the available options are:

• Cash Receipt Voucher • Cash Payment Voucher • Bank Receipt Voucher • Bank Payment Voucher • Contra Voucher • Journal Voucher

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Click the Template menu button and select Batches to create different batches for different templates.

In the above screen, a batch has been created for Bank receipt template as Bank andthe Location “Blue” has been defined. Also Sub Type Bank Receipt Voucher has been

selected. Also, the No. Series has been defined for each batch.

Note 1: User has to create different batches for different Locations.

Note 2: If the Location is mapped with particular batch with a Sub Type then theprogram will allow the user to enter the transactions for the defined G/L accounts in theLocation card with defined No. Series. If a user does not define any Location code in the

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batch, then the program will take the G/L accounts and No. Series defined in theCompany Information master.

Note 3: If user has not defined any Sub Type in the template then the particular batch inthe template will run as Standard Navision “Journals”.

Standard Text Codes

NAVIGATION :F INANCIAL MANAGEMENT → SETUP → GENERAL → S TANDARD TEXT CODES

Fields Description:

Fields Description

Code Enter the Code

Description Enter the Description for the defined code

General ledger Setup

NAVIGATION :F INANCIAL MANAGEMENT → SETUP → GENERAL LEDGER SETUP

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Fields Description:

Fields Description

Activate Cheque No. In case check mark is true then following will happen:- Document No will not be replaced by Cheque No

while using Computer or Manual Cheque option.

- Cheque No & Cheque date will flow in Bank ledger Entry in case of Bank Receipt, Bank Payment andContra Voucher. Cheque No. and Cheque Datewill also flow in Check Ledger Entry in case of Manual or Computer Cheque is used.

In case check mark is false then following will happen, itwill work like default navision.

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Transactions

Cash Receipt Voucher

NAVIGATION :F INANCIAL M ANAGEMENT → C ASH M ANAGEMENT → C ASH RECEIPT VOUCHER

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Select the batch in which the voucher should be posted. Here select Cash to post thetransaction. In the above screen, the batch is attached with the Location “Blue”.

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To make the transactions in Cash Receipt Voucher as received Cash paymentfrom the Customer, fill the fields in Cash receipt Voucher as follows:

First Line

Posting Date: 01/04/06 Document Type: Payment Document No.: UCR/0010 Account Type: G/L Account Account No.: 2910 Description : Cash Debit Amount: 10000

Second Line

Posting Date: 01/04/06 Document Type: Payment Document No.: UCR/0010 Account Type: Customer Account No.: 10000 Description : The Cannon Group PLC Credit Amount: 10000

Narration

Click Narration menu button to enter the Line Narration or Voucher Narration.

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Click the Line Narration option to enter the narration for particular line. A new window willopen.

On the header part, the program will show the Document No. On Line level enter thenarration for the selected line.

User can also select the Standard text from lookup list available on the line level.

Click the Voucher Narration option to enter the narration for Voucher. A new window willopen.

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On the header part, the program will show the Document No. for which the narration hasbeen entered.

On line level the narration can be entered for particular voucher. User can also select theStandard text from lookup list available on the line level.

Post the Journal.


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NAVIGATION :F INANCIAL M ANAGEMENT → GENERAL LEDGER → HISTORY → REGISTERS

The user can view the posted transaction - G/L Entry.

The program will create the following entries:

For the document number: CASHRCPT014

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Particulars Type Amount(Rs)Cash DR 10000To, Customer CR 10000

User can view the Line Narration and Voucher Narration entered at the time of posting of Cash receipt voucher.

Click the Entry menu button and select Narration option to view the voucher narration.

Click the Entry menu button and select Line Narration option to view the Line narration.

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A user can also view the Narration in Customer Ledger entry.

User can take the print of the poster voucher by clicking Print voucher option in Entrymenu button.

In Options tab user can view the voucher with line narration by clicking the option “PrintLine narration”

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Program will by default show the filter options.

Click Preview menu button to view the voucher or click Print menu button to print thevoucher.

User can also print the voucher by click Post and Print option in posting menu button atthe time of posting the voucher.

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Note 1: The system allows posting of the Cash Receipt Voucher if the Debit amountcontains those Cash accounts which are mapped with Location or Company Informationmaster.

Note 2: The system will not allow posting of the voucher if a user has selected Bank Account either in Debit side or in Credit side. A user can post the transaction when he or she receives amount in terms of Cash. Cash account should always be debited whenusing Cash Receipt voucher. Cash receipt Voucher can also be entered from the‘Receivables’ Section. A user can enter multiple vouchers in Cash Receipt Voucher withdifferent posting dates. A user can also view the error texts from Test report beforeposting the voucher. A user can post any type of cash receipt transaction through CashReceipt Voucher.

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NAVIGATION :F INANCIAL MANAGEMENT → C ASH M ANAGEMENT → C ASH P AYMENT VOUCHER

Select the batch in which you want to post the voucher. Here select the batch asCash to post the transaction. In the above screen, you can view the batchattached with Location “Blue.”

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To make the transactions in Cash Payment Voucher as making Cash payment tothe Vendor, fill the fields in Cash Payment Voucher as follows:

First Line

Posting Date: 01/04/06 Document Type: PaymentDocument No.: UCP/0029 Account Type: Vendor Account No.: 10000 Description : Delhi Postmaster Debit Amount: 10000

Second Line

Posting Date: 01/04/06 Document Type: PaymentDocument No.: UCP/0029Account Type: G/L Account Account No.: 2910 Description : CashCredit Amount: 10000

Narration

Click Narration menu button to enter the Line Narration or Voucher Narration.

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Click Line Narration option to enter the narration for particular line. A new window willopen.

On the header part, the program will show the Document No. On the Line level, thenarration can be entered for the selected lines.

A user can also select the Standard text from lookup list available on the line level.

Click Voucher Narration option to enter the narration for the Voucher. A new window willopen.

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On the header part, the program will show the Document No. for which narration can beentered.

On line level enter the narration for the particular voucher. A user can also select theStandard text from lookup list available on the line level.

Post the Journal.

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The user can view the posted transaction - G/L Entry.

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For the document number: CASHPYMT032


Vendor DR 10000

To, Cash CR 10000

A user can view the Line Narration and Voucher Narration entered at the time of postingCash Payment voucher.

Click the Entry menu button and select Narration option to view the voucher narration.

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Click the Entry menu button and select the Line Narration option to view the Linenarration.

A user can also view the Narration in the Vendor Ledger entry.


In Options tab user can view the voucher with line narration by clicking the option “Print

Line narration”

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Note 1: The program will allow posting of the Cash Payment Voucher if the Creditamount contains those Cash accounts which are mapped with Location or CompanyInformation master.

Note 2: The program will not allow posting of the voucher if user has selected Bank Account either in Debit side or in Credit side.

Users can post the transaction when he or she pays amount in terms of Cash. Cashaccount should always be Credit while using cash payment voucher. Cash PaymentVoucher can also be entered from the ‘payables’ Section. A user can enter multiplevouchers in Cash Payment Voucher with different posting dates. A user can also viewthe error texts from Test report before posting the voucher. A user can post any type of Cash Payment transaction through the Cash Payment Voucher .


NAVIGATION :F INANCIAL M ANAGEMENT → C ASH M ANAGEMENT → B ANK RECEIPT VOUCHER

Select the batch in which the voucher has to be posted. Select the Batch to postthe transaction. In the above screen, see that batch as BANK is attached with theLocation “Blue.”

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To make the transactions in bank Receipt Voucher as receiving payment from theCustomer by Cheque, fill the fields in bank receipt Voucher as follows:

First Line

Posting Date: 01/04/06 Document Type: PaymentDocument No.: UBR/0001 Account Type: Bank AccountAccount No.: GIRO Description : Giro BankCheque No.: 88888Cheque Date: 01/04/06Debit Amount: 20000

Second Line

Posting Date: 01/04/06 Document Type: PaymentDocument No.: UBR/0001Account Type: Customer Account No.: 10000 Description : The Cannon Group PLC.Cheque No.: 88888Cheque Date: 01/04/06Credit Amount: 20000

Narration

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Click the Narration menu button to enter the Line Narration or Voucher Narration. Clickthe Line Narration option to enter the narration for particular line. A new window willopen.

On the header part, the program will show the Document No. On Line level enter thenarration for the selected line. A user can also select the Standard text from lookup listavailable on the line level

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Click Voucher Narration option to enter the narration for Voucher. A new window willopen.

On the header part, the program system will show the Document No. for which thenarration can be entered. On line level enter the narration for particular voucher.

A user can also select the Standard text from lookup list available on the line level.

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Post the Journal.



A user can view the posted transaction – G/L Entry.

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For the document number: BANKRCPT002

Particulars Type Amount(Rs)Bank DR 20000To, Customer CR 20000

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A user can view the Line Narration and Voucher Narration entered at the time of postingBank receipt voucher.

Click the Entry menu button and select the Narration option to view the voucher narration.

Click the Entry menu button and select the Line Narration option to view the Linenarration.

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A user can also view the Narration for Customer ledger entry.



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Note 1: The program will allow posting the Bank Receipt Voucher if the Debit amountcontains those Bank accounts which are mapped with Location or Company Informationmaster.

Note 2: The program will not allow posting the voucher if user has selected Cash Account either in Debit side or in Credit side. A user can post the transaction whenhe/she receives amount in terms of Cheque. Bank account should always be Debit whileusing bank receipt voucher. Bank Receipt Voucher can also be entered from‘receivables’ Section. A user can enter multiple vouchers in Bank Receipt Voucher withdifferent posting dates. A user can also view the error texts from Test report beforeposting the voucher. A user can post any kind of Bank Receipt transaction through BankReceipt Voucher.

Cheque number and date will flow in Bank ledger entry after posting the voucher if “Activate Cheque No.” field is true in General Ledger Setup.

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Bank Payment Voucher

NAVIGATION :F INANCIAL M ANAGEMENT → C ASH M ANAGEMENT → B ANK P AYMENT VOUCHER

Select the batch in which the voucher has to be posted. Select the Batch to postthe transaction. In the above screen, see that batch as BANK is attached withLocation “Blue.”

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To make the transactions in Bank Payment Voucher as making payment to theVendor by Cheque, fill the fields in bank payment Voucher as follows:

First Line

Posting Date: 01/04/06 Document Type: Payment Document No.: UBP/0001 Account Type: Vendor Account No.: 10000 Description : Delhi post Master Cheque No.: 55555 Cheque Date: 01/04/06 Debit Amount: 25000

Second Line

Posting Date: 01/04/06 Document Type: Payment Document No.: UBP/0001 Account Type: Bank Account Account No.: GIRO Description : Giro Bank Cheque No.: 55555 Cheque Date: 01/04/06 Credit Amount: 25000

Narration

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Click the Narration menu button to enter the Line Narration or Voucher Narration. Clickthe Line Narration option to enter the narration for particular line. A new window willopen.

On the header part, the program will show the Document No. On Line level enter thenarration for the selected line. A user can also select the Standard text from lookup listavailable on the line level

Click the Voucher Narration option to enter the narration for Voucher. A new window willopen.

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On the header part, the program will show the Document No. for which the narration canbe entered. On line level enter the narration for the particular voucher. A user can alsoselect the Standard text from lookup list available on the line level.

Post the Journal.

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NAVIGATION :

F INANCIAL M ANAGEMENT → GENERAL LEDGER → HISTORY → REGISTERS

User can view the posted transaction- G/L Entry

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For the document number: BANKPYMT001

Particulars Type Amount(Rs)Vendor DR 25000To, Bank CR 25000

User can view the Line Narration and Voucher Narration entered at the time of postingBank Payment Voucher.

Click Entry menu button and select Narration menu item to view the voucher narration.

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Click Entry menu button and select Line Narration menu item to view the line narration.

User can also view the narration for the Vendor Ledger entry.


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Note 1: The program allows the posting of the Bank Payment Voucher if the Creditamount contains those Bank accounts which are mapped with Location or CompanyInformation master.

Note 2: The program allows the posting of the voucher if user selects Cash Accounteither in debit side or in credit side.

User can post the transaction if the user pays amount in terms of cheque. Bank accountis always Credit while using bank payment voucher.

Bank Payment Voucher can also be entered from ‘Payables’ section.

User can enter multiple vouchers with different posting dates in Bank Payment Voucher.

User can also view the error texts from Test report before posting the voucher.

User can post any type of bank payment transaction through Bank Payment Voucher.

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Cheque number and date will flow in Bank ledger entry after posting the voucher if “Activate Cheque No.” field is true in General Ledger Setup and Bank Payment Typefiled in Bank Payment Voucher should be Blank.

In case Bank Payment type is Manual Check and Computer check then user is advisedto post the transaction in one line while taking Bal. Account as it helps in voiding thecheck ledger entry.

If the Activate Cheque No. is true in General Ledger Setup then while making paymentthrough Bank Payment voucher system will flow the Cheque number and date in BankLedger entry and Check Ledger entry respectively.

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Contra Voucher

NAVIGATION :F INANCIAL M ANAGEMENT → C ASH M ANAGEMENT → CONTRA VOUCHER

Select the batch in which you want to post the voucher. In the above screen batch asCONTRA is selected to post the transaction. You can see that batch is attached withlocation “Blue ”.

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To make the transactions in Contra Voucher as Withdrawing cash from bank, fillthe fields in Contra Voucher as follows:

First Line

Posting Date: 01/04/06 Document Type: Payment

Document No.: UC/0001 Account Type: G/L Account Account No.: 2910 Description : Cash Cheque No.: 03333 Cheque Date: 01/04/06 Debit Amount: 10000

Second Line

Posting Date: 01/04/06 Document Type: Payment Document No.: UC/0001 Account Type: Bank Account Account No.: GIRO Description : Giro Bank Cheque No.: 03333 Cheque Date: 01/04/06 Credit Amount: 10000

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Narration

Click Narration menu button to select either the Line Narration or Voucher Narrationmenu item.

Click Line Narration menu item to enter narration for the particular line. Now Line

Narration window opens.

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On the header part, the program shows the document number On line level user can enter the narration for the selected line.

User can also select the standard text from the lookup list.

Click Voucher Narration menu item to enter the narration for voucher. Now Voucher Narration window opens.

On the header part, the program shows the document number for which user can enter the narration.

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On line level, user can enter narration for the particular voucher.User can also select the standard text from the lookup list.

Post the Journal




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The program creates the following entries for the document number: CT000155

Particulars Type Amount(Rs)Cash DR 10000To, Bank CR 10000


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User can also view the narration for the Bank Ledger Entry.



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Note 1: The program allows the posting of Contra Voucher if the credit amount and debitamount contain those Bank /Cash accounts which are mapped with Location / CompanyInformation Master against Cash Book or Bank Book.

Note 2: The program does not allows the posting of the voucher if user selects any other account apart from Cash or Bank Account either in Debit side or in Credit side.

User can post the transaction when the user wants to withdraw cash from bank, depositcash in bank, transfer amount from one cash account to another cash account within thelocation, transfer amount from one bank account to another bank account within thelocation.

The program posts the contra voucher only if the cash and bank accounts are mappedwith Cash Receipt, Cash Payment, Bank Receipt, Bank Payment Voucher.

User can enter multiple vouchers with different posting dates in Contra Voucher.

User can also view the error texts from Test report before posting the voucher.Cheque number and date will flow in Bank ledger entry after posting the voucher if “Activate Cheque No.” field is true in General Ledger Setup and Bank Payment Typefiled in Contra Voucher should be Blank.

In case Bank Payment type is Manual Check and Computer check then user is advisedto post the transaction in one line while taking Bal. Account as it helps in voiding thecheck ledger entry.

If the Activate Cheque No. is true in General Ledger Setup then while making paymentthrough Contra voucher system will flow the Cheque number and date in Bank Ledger entry and Check Ledger entry respectively.

Note: If user wants to transfer Cash from one location to another location then he/sheshould have creates two different Cash receipt/payment voucher in the following way:

Suppose from Location Blue you want to transfer Rs. 10000 cash to location Green

Cash Payment Voucher (Blue Location)


Location Green DR 10000To, Cash CR 10000

Cash Receipt Voucher (Green Location)

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Particulars Type Amount(Rs)Cash DR 10000To, Location Blue CR 10000

Journal Voucher

NAVIGATION :F INANCIAL M ANAGEMENT → GENERAL LEDGER → J OURNAL VOUCHER

Select the batch in which you want to post the voucher. In the above screen batch as:JOURNAL is selected to post the transaction. In the above screen you can see thatbatch is attached with location “Blue ”.

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To make the transactions in Journal Voucher as booking expense and creditingvendor, fill the fields in Journal Voucher as follows:

First Line

Posting Date: 01/04/06 Document Type: Invoice Document No.: UJ/0001 Account Type: G/L Account Account No.: 8410 Description : Advertisement Debit Amount: 50000

Second Line

Posting Date: 01/04/06 Document Type: Invoice Document No.: UJ/0001 Account Type: Vendor Account No.: 10000 Description : Delhi Postmaster Credit Amount: 50000

Narration

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Click Narration menu button to select either the Line Narration or Voucher Narration.

Click Line Narration menu item to enter the narration for particular line. Now the LineNarration window opens.

On the header part, the program shows the document number On Line level user canenter the narration for the selected line.


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User can click Voucher Narration menu item to enter the narration for voucher. After thatVoucher Narration window opens.

On the header part, the program will show the document number for which user canenter the narration.

On line level, user can enter the narration for particular voucher.


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Post the Journal




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The program creates the following entries for the document number: JOURNAL0006

Particulars Type Amount(Rs) Advertisement DR 50000To, Vendor CR 50000


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User can also view the narration for the Customer / Vendor Ledger Entry.



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Note 1: The program allows the posting of the Journal Voucher if the credit amount anddebit amount do not contain those Bank /Cash accounts which are mapped withLocation or Company Information Master against Cash Book or Bank Book.

Note 2: The program does not allow the posting of the voucher if user has selectedCash or Bank either in debit side or in credit side.

User can post the transactions in Journal Voucher when the user wants to make invoicefor vendor/customer, any provisional entry, booking expense, calculatingTDS/TCS/Service Tax, and so on.

User can enter multiple vouchers in Journal Voucher with different posting dates.

User can also view the error texts from Test report before posting the voucher.

User can post any type of journal transaction through Journal Voucher.

Reports

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Day Book

NAVIGATION :F INANCIAL M ANAGEMENT → GENERAL LEDGER → REPORTS → ENTRIES → DAY BOOK

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User can generate the Day Book for all types of vouchers for a specific date.

G/L Entry tab

Fields Description:

Fields Description

Posting Date Enter the posting date for which Day Book

to be printed.

Document No. Enter the document number for which DayBook to be printed.

Global Dimension 1 Code Enter the Global Dimension 1 Code for which transactions have been posted andDay Book to be generated.

Global Dimension 2 Code Enter the Global Dimension 2 Code for which transactions have been posted andDay Book to be generated.

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Options tab

Fields Description:

Fields Description

Line Narration Place a check mark in this field if LineNarration is to be printed.

Voucher Narration Place a check mark in this field if Voucher Narration is to be printed.

Click Preview button if user wants to view the Day Book. User can click Print button if user wants to take printout .

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Cash Book

NAVIGATION :F INANCIAL M ANAGEMENT → C ASH MANAGEMENT → REPORTS → CASH BOOK

User can generate the Cash Book according to the locations for all types of cashtransactions .

G/L Account tab

Fields Description:

Fields Description

No. Enter the cash account number. Theprogram generates the Cash Book only for those cash accounts which are mapped

with Cash Receipt/Payment Book in theLocation Card /Company Information.

Date Filter Enter the date for which Cash Book to begenerated.

Global Dimension 1 Code Enter the Global Dimension 1 Code for which transactions have been posted andCash Book to be generated.

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Fields Description

Global Dimension 2 Code Enter the Global Dimension 2 Code for which transactions have been posted andCash Book to be generated.

Option Tab

Fields Description:

Fields Description

Print Details Place a check mark in this field if details of cash voucher in Cash Book are to beprinted.

Print Line Narration Place a check mark in this field if LineNarration is to be printed

Print Voucher Narration Place a check mark in this field if Voucher Narration is to be printed.

Location Code Select the location code from the lookuplist for which Cash Book is to begenerated.

User has to click Preview button if user wants to view the Cash Book. User has to clickPrint button if user wants to take the printout.

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Bank Book

NAVIGATION :F INANCIAL M ANAGEMENT → C ASH MANAGEMENT → REPORTS → B ANK BOOK

Bank Account Tab

Fields Description:

Fields Description

No. Enter the bank account number. Theprogram generates the Bank Book only for those bank accounts which are mappedwith Bank Receipt/Payment book in theLocation Card/ Company Information.

Date Filter Enter the date for which Bank Book is tobe generated.

Global Dimension 1 Code Enter the Global Dimension 1 Code for which transactions have been posted andBank Book is to be generated.

Global Dimension 2 Code Enter the Global Dimension 2 Code for which transactions have been posted andBank Book is to be generated.

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Option tab

Fields Description:

Fields Description

Print Details Place a check mark in this field if details of bank vouchers in Bank Book are to beprinted.

Print Line Narration Place a check mark in this field if LineNarration is to be printed.

Print Voucher Narration Place a check mark in this field if Voucher Narration is to be printed.

Location Code Select the location code from the lookuplist for which Bank Book is to begenerated.

User has to click Preview button if user wants to view the Bank Book.User has to click Print button if user wants to take the printout.

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Ledgers

NAVIGATION :F INANCIAL M ANAGEMENT → GENERAL LEDGER → REPORTS → ENTREIS → LEDGERS

User can generate the Control accounts with sub-ledger details.

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G/L Account Tab

Fields Description:

Fields Description

No. Enter the G/L account number for whichyou want to print the report

Date Filter Enter the Date for which you want togenerate Ledgers.

Global Dimension 1 Code Enter the Global Dimension 1 Code for which you have posted the transactionsand want to generate Ledgers.

Global Dimension 2 Code Enter the Global Dimension 1 Code for which you have posted the transactionsand want to generate Ledgers.

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Options Tab

Fields Description:

Fields Description

Print Details Place a check mark if you want to printdetails of vouchers in Ledgers

Print Line Narration Place a check mark if you want to printLine Narration.

Print Voucher Narration Place a check mark if you want to printVoucher Narration.

Location Code Select the Location Code from Lookup listfor which you want to generate Ledgers

Click Preview button if you want to view the Ledger or Click Print button if you want totake printout .

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Voucher Register NAVIGATION :

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F INANCIAL M ANAGEMENT → GENERAL LEDGER → REPORTS → ENTREIS → VOUCHERREGISTER

User can generate the Vouchers for Complete register.

G/L Register Tab

Fields Description:

Fields Description

No. Enter the Register number from lookup listfor which you want to print the vouchers.

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Options Tab

Fields Description:

Fields Description

Print Line Narration. Place a check mark if you want to print thevoucher with line narration.

Click Preview button if you want to view the Voucher Register or Click Print button if youwant to take printout .

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Appendix

Cash Receipt Voucher

Rs. 10000 in cash is received from customer “Lotus Powers Ltd”. Post the transaction inCash Receipt Voucher.

Solution:

Cash account should be debited and Customer account should be credited in thefollowing way:


Rs. 5000 paid to vendor “Shire Enterprises” in cash. Post the transaction in CashPayment Voucher.

Solution:

Cash account should be credited and vendor account should be debited in the followingway:

Particulars Type Amount(Rs)Cash DR 10000To, Lotus Powers Ltd CR 10000

Particulars Type Amount(Rs)Shire Enterprises DR 5000To, Cash CR 5000


A cheque of Rs. 50000 is received from customer “Lotus Powers Ltd.”. Post the

transaction in Bank Receipt Voucher.

Solution:

Bank account should be debited and customer account should be credited in thefollowing way:

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Bank Payment Voucher

Cheque for Rs. 50000 issued to vendor “Shire Enterprises”. Post the transaction in BankPayment Voucher.

Solution:

Vendor account should be debited and bank account should be credited in the followingway:

Contra Voucher

Rs. 50000 in cash is deposited in bank account “City Bank”. Post the transaction inContra Voucher.

Solution:

Bank account should be debited and cash account should be credited in the following

way :

Journal Voucher

A bill has been received from vendor “Tours and Travels Ltd” against traveling expensesfor Rs. 15000. Post the transaction in Journal Voucher.

Solution:Traveling charges should be debited and vendor account should be credited in thefollowing way:

Particulars Type Amount(Rs)Bank DR 50000To, Lotus Powers Ltd CR 50000

Particulars Type Amount(Rs)Shire Enterprises DR 50000To, Bank CR 50000

Particulars Type Amount(Rs)City Bank DR 50000To, Cash CR 50000

Particulars Type Amount(Rs)Traveling charges DR 15000To, Tours and Travels Ltd. CR 15000

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Microsoft® Business Solutions–Navision® 4.0 – Workflow Mail

Administrator

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Table of ContentsWorkflow Mail Administrator .................................................................................3 Company Information............................................................................................3 Mail Administrator: ................................................................................................4

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Workflow Mail Administrator

Workflow Mail Administrator (Workflow Manager) can monitor the user tasks which havebeen popped up for authorization. Workflow Manager can also view tasks which havebeen approved or rejected or are in the process of authorization. Workflow Manager has

to be defined in Company information card.

Company Information


Choose the Workflow Manager and Check the Mail Required Field in Workflow Tab.

You have to Login into the System using this User Name defined as Workflow Manager.

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Mail Administrator:

Navigation: Administration → IT Administration → Workflow → Mail Administrator

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This form shows the User tasks.

The Workflow Manager needs to Start the Service for the Workflow and Monitor theTasks.

The Notification for the Pending Tasks would be sent to the relevant Level defined in theWorkflow Template Setup through mail or user tasks.

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Microsoft® Business Solutions–Navision® 4.0 – Unrealized Profit

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Table of ContentsInventory Setup.....................................................................................................3 Item Card: .............................................................................................................3 Transaction ...........................................................................................................4

Transfer Order...................................................................................................4 Viewing the Posted Transaction (Transfer Shipments) ..................................5 Viewing the Posted Transaction (Transfer Receipts).....................................8

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Inventory Setup

Navigation:Financial Management → Setup → Posting Setup → Inventory Setup

Filed Description

Field DescriptionUnrealized Profit Account Choose the GL account which gets debited

or credited if the transfer price in thetransfer order line is different from unit costof the item to be transferred.

Item Card:

Navigation:Purchase → Planning → Items

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In the Item card of item no 1100, the unit cost is 129.671. If the transfer price is more or less than the unit cost then the amount will be debited or credited to Unrealized Profit

Account.

Transaction

Transfer Order

Navigation:

Purchase → Order Processing → Transfer Orders

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In the above window press F3 to insert new document and enter the followinginformation in Transfer Order header:

No. 1149 Transfer-from Code BLUE Transfer-to Code GREEN

Posting Date 28/06/07 In-Transit Code OUT. LOG.

Enter the following details in the transfer order line:

Item No. 1100 Quantity 10 Transfer Price 1000 (In the Item card of item no. 1100 Unit cost is

129.671) Amount 10000

Post the document as Ship and Receive.


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G/L Entry

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The above window displays the affected G/L Accounts as below:

Description Dr/Cr AmountFinished Goods Dr 1296.71Inventory Adjmt., Retail Cr 1296.71Finished Goods Cr 1296.71Inventory Adjmt., Retail Dr 1296.71Finished Goods Dr 8703.29Unrealized Profit Account Cr 8703.29

Program has credited Unrealized Profit account for amount 8703.29.

In the item card Unit Cost is 129.671 and on transfer order line we have defined 1000 intransfer price field. Quantity was 10 and Amount was 10000.

Difference of 8703.29 (10000-1296.71) has been credited to Unrealized Profit Account.



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G/L Entry

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Description Dr/Cr AmountFinished Goods Dr 1296.71Inventory Adjmt., Retail Cr 1296.71Finished Goods Cr 1296.71Inventory Adjmt., Retail Dr 1296.71Finished Goods Cr 8703.29Unrealized Profit Account Dr 8703.29

Program has debited Unrealized Profit account for amount 8703.29.

Note: Similarly if in the transfer order, transfer price is less than the unit cost thenprogram will debit the unrealized profit account with the difference amount in the

shipping location and credit the unrealized profit account with the difference amount inthe receiving location.

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Microsoft ® Business Solutions–Navision ® 4.0- Excise Loading on

Inventory

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Table of ContentsOverview...............................................................................................................3

Detailed Setup...................................................................................................3 Comprehensive Functionality ............................................................................3

Setup Required.....................................................................................................3 Excise Setup: ....................................................................................................3 E.C.C. Nos. .......................................................................................................4 Excise No. Series:.............................................................................................4 Claim Setoff:......................................................................................................6 Structure:...........................................................................................................7

Transactions .........................................................................................................7 Excise Amount Loading on Inventory in case Item is Non CENVATABLE........7

Viewing the Posted Transaction ....................................................................9 Excise Amount Loading on Inventory in case Duties Paid on Goods are notavailable for the CENVAT Credit. ....................................................................11


Excise Amount Loading on Inventory where Item is CENVATABLE ...............18 Viewing the Posted Transaction ..................................................................20

Updating of RG register in case of Excise Exempted Goods ..........................22 Viewing the Posted Transaction ..................................................................23

Excise Loading on Inventory when Transferring Goods from CENVATABLELocation to Non CENVATABLE Location ........................................................26

Viewing the Posted Transaction (Transfer Shipments) ................................27 Viewing the Posted Transaction (Transfer Receipts)...................................30

Excise Loading on Inventory when Transferring Goods from CENVATABLELocation to CENVATABLE Location................................................................32

Viewing the Posted Transaction (Transfer Shipments) ................................33

Viewing the Posted Transaction (Transfer Receipts)...................................36 Transfer of Exempted Goods from CENVATABLE Location to CENVATABLELocation...........................................................................................................37

Viewing the Posted Transaction (Transfer Shipments) ................................39 Viewing the Posted Transaction (Transfer Receipts)...................................42

Excise, VAT and Charges loading on inventory using Expected Cost throughPurchase Order. ..............................................................................................45

Appendix.............................................................................................................45

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Overview

The Excise Loading on Inventory functionality enables you to load excise duties on theinventory. The excise duties are not allowed as credit under CENVAT Credit Rules.

Detailed Setup

Following setup is required to enable the Excise Loading on Inventory functionality.

Setup Area DescriptionExcise Setup You should setup the excise posting setup and

other excise setup.

Structure Define structure to calculate the excise amount.


Following comprehensive functionalities are covered under Excise Loading on Inventory:

• Identify at the time of purchase that the CENVAT credit is not available and loadthe same on the purchases.

• Identify at the time of transfer from manufacturing location to manufacturinglocation that the CENVAT credit is not available and load the same on theinventory.

• Update the RG 23 A/C Part I registers in case of excise exempted goods.

Setup Required

Following setups are required for Excise Loading on Inventory functionality:

• Excise Setup• E.C.C Nos.• Excise No. Series• Claim Setoff • Structure

Excise Setup:

Navigation:

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Financial Management → Setup → Excise → Posting Setup

In combination of Excise Business Posting Group and Excise Product Posting Groupenter the percentages and formula for the calculation of excise amount and provide theG/L Account code to affect the financial part.

E.C.C. Nos.

Navigation:General Ledger → Setup → Excise → E.C.C. Nos.

In case more than one location exist, then you can define location-wise ECC number,otherwise one ECC number can be defined and mapped with company in the CompanyInformation setup.

Excise No. Series:

Navigation:

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Financial Management → Setup → Excise → Excise No. Series


Field DescriptionType Select the RG register type from the dropdown list.

E.C.C. No. Select the relevant ECC number from the list.

Description Enter a description for the reference.

No. Series Select the number series that you have created.

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Claim Setoff:

Navigation:Financial Management → Setup → Excise → Claim Setoff

The Claim Setoff window allows you to define the eligibility criteria between excise dutycomponents to setoff the liability against the available excise credit as per excise dutycomponents .

The column headings are denoting the excise credit components and rows are denoting

excise liability components. The available credit of a particular duty component can beused when the excise duty component are defined in the rows under a particular columnheading.

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Structure:

Navigation:Financial Management → Setup → Structure → Structure

Define a structure that shows the excise.

Transactions

Excise Amount Loading on Inventory in case Item is Non CENVATABLE.

Purchase Order


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To calculate excise, fill the fields in the Purchase Order form as follows:

On the Header:

Buy from Vendor No : 10000 Structure: New Excise

On the Line:

Type : Item No. : 70000 (In the Item Card, Excise Accounting Type should

be “Without CENVAT”) Description : Side Panel Quantity: 10 Direct Unit Cost: 1000 Line Amount: 10000

Calculate Structure


Post the Order.

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G/L Entry


Particulars Type Amount(Rs)Purchase DR 11630Vendor CR 11630Raw Material DR 11630Direct Cost

Applied, Rawmat.

CR 11630

The program will load the excise amount on inventory and will not create any exciseentry.

The program will calculate the excise amount according to the posting setup, but after posting the purchase order, the program will load the excise amount on inventory andwill not create any RG 23 A/C Part I and II entry.

Note 1: You can also post the transaction from the Purchase Invoice.

Note 2: You can post the same transaction for the capital Item.

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Excise Amount Loading on Inventory in case Duties Paid on Goods are not available for the CENVAT Credit.

Handel led through Charge (Item)

Purchase Order



On the Header:


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On the First Line:

Type : Item No. : 1000 (In the Item Card, Excise Accounting Type should be

“With CENVAT”) Description : Bicycle Quantity: 10 Direct Unit Cost: 1000 Line Amount: 10000

On the Second Line:

Type : Charge (Item) No. : Other Duty (Excise Product posting group should be nil) Description : Other Duty Quantity: 1 Direct Unit Cost: 100 Line Amount: 100

Calculate Structure


Suggest item Charge Assignment for Charge (Item) with receipt line in Item charge Assignment window.

Post the Order .

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G/L Entry


Particulars Type Amount(Rs)Purchase DR 100Purchase DR 10000CENVAT Cr.Receivable

DR 1630

Vendor CR 11730FinishedGoods

DR 10000

Direct Cost Applied, Retail

CR 10000

FinishedGoods

DR 100

Direct Cost Applied, Retail

CR 100

In this case, the program will load the charge (item) amount on inventory.

On the purchase line we have mentioned Rs. 100 as direct cost and the quantity was 1,and there was no excise product posting group attached with charge (item). After postingthe program has load the amount on inventory.

The program will debit the CENVAT Cr Receivable account for cenvatable item (first linein the Purchase Order) and will create the RG 23 A Part I and II entries.

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RG 23 Part II Entry

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Note 1: You can also post the transaction from the Purchase Invoice .


Note 3: This case can also be handled though structure charges. You need to selectcharges in the Structure, place a check mark in the Loading on Inventory field, andmention the account number; where charges amount has to be debited.

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Excise Amount Loading on Inventory where Item is CENVATABLE

Purchase Order


Field Description

Field Description

Excise Loading on Inventory Place a check mark in this field if you wantto load the excise amount on inventory.

The program will not crate any RG 23 A/CPart I and II entries if a check mark hasbeen placed in this field on the purchaseline.

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On the Header:


On the First Line:


“With CENVAT”) Description : Bicycle Quantity: 10 Direct Unit Cost: 1000 Line Amount: 10000 Excise Loading on Inventory True

Calculate Structure


Post the Order.

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G/L Entry

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Particulars Type Amount(Rs)Purchase DR 11630Vendor CR 11630

Finished Goods DR 11630Direct Cost

Applied, RetailCR 11630

The program will load the excise amount on inventory and will not create any exciseentry.

The program will calculate the excise amount according to the posting setup. Theprogram will load the excise amount on inventory after posting the purchase order andwill not create any RG 23 A/C Part I and II entry.

Note 1: You can also post the transaction from the Purchase Invoice.


Note 3: The Excise Accounting Type should be ‘With CENVAT’ for Type item.

Note 4: The “Excise Loading on Inventory” field can also be used while posting thePurchase Return Order/Credit Memo.

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Updating of RG register in case of Excise Exempted Goods

In this case, the program will not create any RG 23 A/C Part II entry, but will create RG23 A/C Part I entry.

Purchase Order



On the Header:


On the First Line:


“With CENVAT”) Description : Bicycle Quantity: 10 Direct Unit Cost: 1000

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Line Amount: 10000

Calculate Structure


The program will calculate the excise amount as zero, because in the posting setup;percentages of excise duty components are defined as Zero.

Post the Order.



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G/L Entry


Particulars Type Amount(Rs)Purchase DR 10000Vendor CR 10000

In this case program will not create any excise entry. But program will create RG 23 A/CPart I entry.

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RG 23 A Part I

Note 1: You can also post the transaction from the Purchase Invoice/ReturnOrder/Credit Memo.


Note 3: The Excise Accounting Type should be ‘With CENVAT’ for Type item.

Note 4: The Excise Duty Components percentages should be zero in the Posting setup.

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Excise Loading on Inventory when Transferring Goods from CENVATABLE Location to Non CENVATABLE Location

Transfer Order


To calculate excise, fill the fields in the Transfer Order window as follows:

On the Header:

No : 1057 Transfer from Code : Blue (Cenvatable location)Transfer to Code : Red (Non Cenvatable location) – don’t mention ECC No. in

the Location card.In-transit Code : Out. Log Structure: New Excise

On the Line:Item No .: 1000 Description : Bicycle Quantity: 10 Transfer Price: 1000 Amount: 10000

Calculate Structure

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Post the Transfer Order as Ship and Receive.



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G/L Entry

The program will credit the Excise Payable account with the excise amount.

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RG 23 A Part I


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G/L Entry

The program will load the excise amount on inventory in receiving location.

In receiving location the program will not create any RG 23 A/C Part I and II entries.

Note: Please do not mention the ECC number in the receiving location if you want totransfer the goods from CENVATABLE location to Non CENVATABLE location.

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Excise Loading on Inventory when Transferring Goods from CENVATABLE Location to CENVATABLE Location



Field Description

Excise Loading on Inventory Place a check mark in this field if you wantto load the excise amount on inventory inthe receiving location.

The program will not crate any RG 23 A/CPart I and II entries in the receivinglocation if a check mark has been placed in

this field on the transfer order line.


On the Header:

No : 1058 Transfer from Code : Blue (CENVATABLE location)

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Transfer to Code : Green (CENVATABLE location)In-transit Code : Out. Log Structure: New Excise

On the Line:

Item No .: 1000 Description : Bicycle Quantity: 10 Transfer Price: 1000 Amount: 10000 Excise Loading on Inventory True

Calculate Structure

Post the Transfer order as Ship and Receive.



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G/L Entry

The program will credit the Excise Payable account with excise amount.

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RG 23 A Part I

The program will create RG 23 A Part I entry with the value in the Quantity Sold field.

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G/L Entry

The Program will load the excise amount on inventory in receiving location.

In receiving location the program will not create any RG 23 A/C part I and II entries.

Transfer of Exempted Goods from CENVATABLE Location to CENVATABLE Location


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On the Header:

No : 1059 Transfer from Code : Blue (CENVATABLE location)Transfer to Code : Green (CENVATABLE location)In-transit Code : Out. Log Structure: New Excise On the Line:

Item No .: 1100 Description : Front Wheel Quantity: 10 Transfer Price: 1000 Amount: 10000

Calculate Structure

The program will calculate the excise amount as zero, because in the posting setup;percentages of excise duty components are defined as Zero.


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G/L Entry

The program will not create any G/L entry related to the excise amount.

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RG 23 A Part I


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G/L Entry

The program will not create entry related to the excise amount.

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RG 23 A Part I

Note: You can post the same transaction for the capital Item.

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Excise, VAT and Charges loading on inventory using Expected Cost through Purchase Order

Purchase Order


To calculate excise, VAT and Charges, fill the fields in the Purchase Order form asfollows:

On the Header:

Buy from Vendor No : 10000 Structure: Structure (In Structure, excise will be calculated on

base value, VAT will be calculated on Base value + Excise Amount and charges Amount is 100 fixed value with loading on inventory field true and Account number is 8246 (Freight A/C)

On the Line:

Type : Item No. : 70001 (In the Item Card, Excise Accounting Type

should be “With CENVAT” and Costing method should be FIFO in item card.)

Description : Base Quantity: 10 Direct Unit Cost: 1000 Line Amount: 10000 Excise Loading on Inventory: True

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Non ITC Claimable Usage %: 50

Calculate Structure

Excise % is 16.30, VAT % is 12.50 and Charges are 100 (fixed value).

In this case program will calculate Excise Amount as 1630, VAT Amount as 1454 andCharges Amount as 100.

Press F9 to view the Statistics

Post the Order as Receive.

View the Posted receipt document from Order menu button.

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Click Navigate button in the Posted purchase Receipts window.

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G/L Entry


Particulars Type Amount(Rs)Raw materials(Interim)

DR 12457

Inventory AdjustmentInterim.

CR 12457

In this case the program will load the Excise Amount (1630), Charges Amount (100) andVAT Amount (727) on inventory.

Item ledger Entry

In the Item Ledger Entry window, the program will update the value in the Cost Amount(Expected) field.

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Value Entry

In the Value Entries window, the program will update the value in the Cost Amount(Expected) field.

Now post the same order as Invoice.

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G/L Entry

The program creates the following G/L entries:

Particulars Type Amount(Rs)Raw materials (Interim) CR 12457Inventory Adjustment Interim. DR 12457Raw Material DR 12457Direct Cost Applied CR 12457Purchase DR 12357Purchase Tax DR 727Freight DR 100

Vendor CR 13184

Value Entry

The program will update the value in the Cost Amount (Actual) field.

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Item ledger Entry

In the original Item ledger entry, the program will transfer the value from the Cost Amount (Expected) field to the Cost Amount (Actual) field.

Note 1: You can also load the excise amount on inventory if the Excise Accounting Typein the Item card is Without CENVAT.

Note 2: You can post the same transaction through the Purchase Invoice.

Note 3: You can post the same transaction for the capital item.

Appendix

Case 1:

Goods where duties paid but not allowed as CENVAT credit.

Following goods are used in manufacturing and producing of dutiable goods or providingthe taxable services but CENVAT credit [0]is not allowed under CENVAT Credit Rules for these goods

• Light Diesel Oil• High Speed Diesel oil• Motor Spirit

The duties paid on these goods have to be loaded on the inventory

Example:The manufacturer has purchased light diesel oil incurring the following:

Purchase price Rs 10,000Excise duty Rs 2,000

The following entry shows the loading of excise duty on the goods at the purchase time:

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Debit Rs Credit Rs

Purchases 12000Vendor 12000

Note: The RG registers will not be updated.

Case 2:

Duties paid on goods; on which CENVAT credit is not available

The duties other than the duties mentioned in the CENVAT Credit rules or amendmentsmade there under shall not be allowed, as CENVAT Credit should be loaded on theinventory.

Example:

The manufacturer has purchased 10 units of goods incurring the following:

Purchase price Rs 10,000Duty specified under First Schedule to the Excise Tariff Act Rs 2,000Duty leviable under the X Act Rs 1,000

Duty leviable under the X act is not specified under CENVAT Credit rules or amendments made there under.

The following entry shows the loading of duty on the goods and CENVAT credit at thepurchase time:

Debit Rs Credit RsPurchases 11000CENVAT credit 2000Vendor 13000

Note: The RG registers will be updated as under:

RG 23 A Part I with 10RG 23 A Part II with 2000

Case 3:

Goods used in Production / Manufacture of Exempted Goods or ExemptedServices

The duties paid goods which are used in producing or manufacturing of exemptedgoods; and the goods which are used in providing the exempted services are notallowed as CENVAT credit.

The paid duties shall be loaded on the inventory.

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Example:The manufacturer has purchased goods, which are to be used directly or indirectly inmanufacturing the final goods. The final goods are exempted from the excise duty.

Purchase price Rs 10,000Excise duty Rs 2,000

The following entry will be used to load the excise duty on the goods (CENVAT notavailable) at the purchase time:

Debit Rs Credit RsPurchases 12000Vendor 12000

Note: The RG registers will not be updated.

Case 4:

Excise Exemption

Take the example of Company ABC, which has multiple manufacturing locations. One of the manufacturing locations has excise duty benefit as 100% exemption. In this scenarioCompany ABC needs to maintain the RG 23 A Part I register for this location asmaintained in the other locations.

Location XYZ

Raw Material @ = Rs. 1000Quantity = 10Excise@ 0% = Rs. 0

The entry will be as follows:

Debit Rs Credit RsPurchase A/C 10000Vendor A/C 10000

After Posting Purchase Order/Invoice, the program will update RG23A/C Part I withQuantity =10. Also the program will not create any entry in RG23A/C Part II.

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Microsoft® Business Solutions–Navision® 4.0 – Excise Duty

Computation on Stock Transfer andCaptive Consumption of Manufactured

Material

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Table of Contents

Overview ............................................................................................................................ 3

Detailed Setup .............................................................................................................. 3

Comprehensive Functionality ..................................................................................... 4

Reports ........................................................................................................................... 4

Setup Required ................................................................................................................. 5

Excise Setup for MRP ................................................................................................. 5

Inventory Setup: ........................................................................................................... 6

Location Setup .............................................................................................................. 8

Item Card: .................................................................................................................... 10

Transactions .................................................................................................................... 13

Computation of Excise on Stock Transfer (Manufacturing to Trading Location)in case of MRP ........................................................................................................... 13

Viewing the Posted Transaction (Transfer Shipments) ...............................15

Viewing the Posted Transaction (Transfer Receipts) ..................................18

Computation of Excise on Stock Transfer (Manufacturing to Manufacturing Location) in case of MRP .......................................................................................... 21



Computation of Excise on Stock Transfer (Trading to Trading Location) ......... 29



Computation of Excise on Stock Transfer (Trading to Manufacturing Location)....................................................................................................................................... 38



Computation of Excise on Stock Transfer (Trading to Manufacturing Location in case of Capital Item) .............................................................................................. 46



Computation of Excise on Stock Transfer (Manufacturing to Trading Location)....................................................................................................................................... 52



Captive Consumption ..................................................................................60


Item Journal ................................................................................................................ 67

Viewing the Posted Transaction .................................................................70

Report ............................................................................................................................... 72

Appendix .......................................................................................................................... 74

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Overview

The material transfer from one location to another location is very normal in anybusiness scenario. Excise computation on excisable goods and /or excisable capital

goods and / or with MRP in the transfer order document in case of transfer frommanufacturing to trading location, manufacturing to manufacturing location, trading tomanufacturing location, and trading to trading location needs to be tracked and recordedinto the respective excise books.

The excisable materials, manufactured within the company premises or factory for thesales and distributions are also used in factory or office according to the requirement.This activity is referred as Captive Consumption and needs to be recorded in the excisebooks. In captive consumption, the calculation of the excise liability will be done on unitcost or cost of production. The calculated excise liability needs to be created and for theconsumption location; excise will be loaded on the inventory ledger in the Chart of

Accounts.

Detailed Setup

Setup for excise computation on transfer order and the captive consumptionfunctionalities are as below:

Setup Area DescriptionExcise Setup You should setup the excise posting setup and other excise

setup.

Structure Define structure to calculate the excise amount.

Item Card The ECC No./ Item Categories form needs to be filled upfor the excise computation on MRP.

Unit cost of the product needs to be provided for the captiveconsumption as user can also change the unit cost on thetransfer line

Location Setup The Trading Location field should be checked to specify astrading location.

ECC number should be attached for excisable location.

Use number series in the Location card to track location-wise captive consumption shipment details.

Inventory Setup Define the Captive Consumption percentage.

Use number series for easy tracking of captiveconsumption order and shipment.

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Setup Area DescriptionExternal document number is mandatory.


Computation of excise on MRP in case of stock transfer and Captive Consumption of produced material are explained as below.

• Computation of excise on MRP in the Stock Transfer document.

• Excise computation for both excisable normal goods and excisable capital goods.

• The stock transfer means transfer between manufacturing to trading location,manufacturing to manufacturing location, trading to manufacturing location, andtrading to trading location.

•

Stock transfer will update the RG register including RG 23 A Part I and Part II,RG 23 C Part I and Part II, and RG 23 D.

• The captive consumption of manufactured item will update the RG register.

Reports

Quarterly Return for Traders report is being updated with stock transfer with excisecomputation made on MRP.

The Captive Consumption report display all record of material consumed for captiveconsumption. It also specifies the cost of production including the administration costand the excise amount on daily basis.

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Setup Required

Excise Setup for MRP

Navigation:Financial Management → Setup → Excise → Posting Setup

In the excise components calculation type new option has been introduced as “% ofMRP”. While calculating Excise on MRP you should select the calculation type as “% ofMRP” in the relevant excise components. If you want to select calculation formula for any of the component then you need to use “Excise %” as option.

Create the Excise posting setup in case of MRP on the following basis:Excise Posting Group : GEN Excise Prod. Group : 84.15 Excise Payable Account : 2994 CENVAT Cr. Receivable Account : 2993 CENVAT Cr. Deferred Account : 2996 BED Calculation Type : % of MRP BED % : 10 BED Calculation formula : Blank SED Calculation Type : % of MRP SED % : 2 SED Calculation Formula : Blank AED (GSI) Calculation Type : % of MRP AED (GSI) % : 2 AED (GSI/TTA) Calculation Formula : Blank SAED Calculation Type : % of MRP SAED % : 2 SAED Calculation Formula : Blank ECESS Calculation Type : Excise % ECESS % : 2

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ECESS Calculation Formula : BED Amount SHE CESS Calculation Type : Excise % SHE CESS %: 1 SHE CESS Calculation Formula : BED Amount

Inventory Setup:

Navigation: Warehouse → Setup → Inventory Setup

Fields Description

On the General tab

Fields DescriptionCaptive Consumption % Define the captive consumption % to be

loaded on the cost of production in thisfield for calculating the excise duty in caseof material has been used for captiveconsumption.

External Doc. No. Mandatory Place a check mark in this field to updatethe RG 23 D register with vendor invoice

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Fields Descriptionnumber.

Also define the number series on the Numbering tab:

Fields Description

On the Numbering tab

Fields DescriptionTransfer Order Nos. (Captive) Attach a number series to allow the

program to assign the number for captiveconsumption header

Posted Shpt. Nos. (Captive) You need to attach another number seriesfor the posted shipment of captiveconsumption in this field.

The number series attached in the PostedShpt. Nos. (Captive) field will be used for all captive consumption posted shipmentirrespective of location.

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Location Setup

Navigation:

Warehouse→

Setup→

LocationsCreate the location where the material are being produced and specify the location ECCnumber.

The above BLUE location is the manufacturing location with ECC number. For examplethe excisable material will be transferred from BLUE location for captive consumption.

Also define the number series in the Sales Shpt. Nos. (Captive) field for the BLUElocation to record the posted captive consumption shipment with location specificnumber series.

Create a location where the produced material will be used as captive consumption andkeep the Location ECC number blank.

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In the above window the RED location is created and no ECC number has beenattached with it. RED location will be the receiving location where the materials are usedas captive consumption.

(In case of captive consumption, the receiving location must not have the ECC number attached with.)

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Place a check mark in the Trading Location field to specify the location as tradinglocation incase of stock transfer as per the above example.

(Note: In Stock Transfer you need to specify the ECC number for each location.)

Item Card:

Navigation:Purchase → Planning → Items

Define the unit cost (cost of production) of the produced material which is used for salesand distribution. It will also be used in captive consumption.

In the above window you enter the unit cost for the FORKLIFT item in the Unit Cost field,which is defined as finished product. Also specify the following information:

Unit Cost 1,000.00 Gen. Prod. Posting Group RETAIL VAT Prod. Posting Group VAT12.5 Excise Prod. Posting Group 94.03 Inventory Posting Group FINISHED

Create a material with following information for the example of MRP stock transfer as

below.

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Enter the following information:

Unit Cost 1,500.00 Gen. Prod. Posting Group RAW MAT VAT Prod. Posting Group VAT12.5 Excise Prod. Posting Group 84.15 Inventory Posting Group RAW MAT

On the Item menu button select the ECC No. /Item Categories menu item.

Setup the Maximum Retail Price and Abatement % for the computation of excise on thestock transfer.

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Fields Description

Fields DescriptionMRP Place a check mark in the MRP field if the

item lies under MRP provision of theExcise Act and excise duty is to becalculated on the basis of MRP.

By placing a check mark in this field theprogram will put the check mark in MRPfield in transfer order line for the particular item.

Maximum Retail Price Define MRP in the Maximum Retail Pricefield. This price will be applicable for assigned E.C.C No in the location at thetime of transferring from one location toanother location and the item is fallingunder the MRP Provision of Excise Act.

Abatement % Define the abatement % in this field.

The program will pick the abatement % for the calculation of excise duty in theTransfer Order if the item lies under theMRP Provision of the Excise Act.

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Transactions

Computation of Excise on Stock Transfer (Manufacturing to Trading Location) in case of MRP


Fields Description

Fields DescriptionMRP The program populates the value in this

field either from the ECC No. or from theItem Category window.

This field is non editable.

Maximum Retail Price The program populates the value in thisfield either from the ECC No. or from theItem Category window.


Abatement % The program populates the value in thisfield either from the ECC No. or from theItem Category window.

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This field is editable.In the above window press F3 to insert new document and enter the followinginformation in Transfer Order header:

No. 1157 Transfer-from Code BLUE ( Manufacturing Location) Transfer-to Code GREEN (Trading Location )

Posting Date 01/04/07 In-Transit Code OUT. LOG.Structure EXCISE Vendor Invoice No . 1212

(Note: Vendor Invoice number is mandatory if the External Doc. No. Mandatory field ischecked in the Inventory Setup while receiving the material)


Item No. 70072 Quantity 10 MRP Check Mark (The program will by default populate

this value from ECC No. /Item Category window.)MRP Price : 1000(Program will by default populate this value

from ECC No. /Item Category window.)Abatement %: 20(The program will by default populate this value

from ECC No. /Item Category window.)

Calculate Structure Value


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Select G/L Entry in the Navigate window and click Show.

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Description Dr/Cr AmountRaw Materials Dr 15,000.00Inventory Adjmt., Raw Mat. Cr 15,000.00Raw Materials Cr 15,000.00Inventory Adjmt., Raw Mat. Dr 15,000.00Raw Materials Dr 1,630.00Excise Payable Account Cr 1,630.00

Calculation of Excise on the following basis :

• MRP Price is 2000 per unit, Quantity is 10.

• Total MRP price is 20000 (2000*10)

• On 20000 Abatement % is 50.

• 20000*50% = 10000. 20000-10000 = 10000

• On 10000, the program will calculate excise @ 16.30%.

• 10000*16.30% = 1630. Excise Amount is 1630 and Excise base amount is10000.

The program will also create Excise entry with excise base amount as 10000.

Select Excise Entry in the Navigate window and click Show.

Select RG 23 A Part I in the Navigate window and click Show.

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The above window displays the detail GL entry as below:

Description Dr/Cr AmountRaw Materials Dr 15,000.00Inventory Adjmt., Raw Mat. Cr 15,000.00Raw Materials Cr 15,000.00Inventory Adjmt., Raw Mat. Dr 15,000.00Raw Materials Cr 1,630.00Cenvat Cr. Receivable(Trading) Dr 1,630.00

Select Excise Entry and click Show.

Select RG 23 D in the Navigate window and click Show.

Note 1: You can also post the same transaction for capital Item while keeping a checkmark in the Claim Deferred Excise field.

Note 2: If MRP field is checked on the transfer order line then Calculation Type in theExcise Posting setup should have % of MRP with the combination of blank calculationformula. In case of calculating the ECESS and SHE CESS, Calculation type should beExcise %.

Note 3: In case of MRP, the program will not allow the user to post the transfer transaction if the Shipping location is a trading location.

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Note 4: In case of MRP, the program will not allow the user to post the transfer transaction if a check mark is placed in the CVD field in the Structure.

Note 5: If Abatement % is zero, then the program will not consider any Abatement % inthe excise calculation.

Note 6: If value in the MRP Price field is zero, then the program will not calculate anyexcise amount.

Computation of Excise on Stock Transfer (Manufacturing to Manufacturing Location) in case of MRP

Create a location named YELLOW, which will be a manufacturing location. For example:


Create a Transfer Order for Manufacturing to Manufacturing Location transfer as per the

example given below:


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No. 1158 Transfer-from Code BLUE (Manufacturing Location)Transfer-to Code YELLOW (Manufacturing Location)Posting Date 01/04/07 In-Transit Code OUT. LOG. Structure EXCISE

Enter the following details on the transfer order line:

Item No. 70072 Quantity 10 MRP Check Mark (The program will by default populate

this value from ECC No. /Item Category window.)MRP Price : 1000(The program will by default populate this

value from ECC No. /Item Category window.)Abatement %: 20(The program will by default populate this value

from ECC No. /Item Category window.)



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Description Dr/Cr AmountRaw Materials Dr 15,000.00Inventory Adjmt., Raw Mat. Cr 15,000.00Raw Materials Cr 15,000.00Inventory Adjmt., Raw Mat. Dr 15,000.00Raw Materials Dr 1,630.00Excise Payable Account Cr 1,630.00

Calculation of Excise on the following basis :




• 20000*50% = 10000. 20000-10000 = 10000


• 10000*16.30% = 1630. Excise Amount is 1630 and Excise base amount is10000.




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Description Dr/Cr AmountRaw Materials Dr 15,000.00Inventory Adjmt., Raw Mat. Cr 15,000.00Raw Materials Cr 15,000.00Inventory Adjmt., Raw Mat. Dr 15,000.00Raw Materials Cr 1,630.00Cenvat Cr. Receivable Account Dr 1,630.00


(Note : In case Capital Item is received in the manufacturing location, then the programwill create two excise entries. Fifty percent of excise amount will be available as excisecredit for the current year and fifty percent will transferred to next year as deferredexcise credit)


Select RG 23 A Part II in the Navigate window and click Show.

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Computation of Excise on Stock Transfer (Trading to Trading Location)

Create a location named SILVER, which will be a trading location. For example:


Create a Transfer Order for Trading to Trading Location transfer as per the examplegiven below:

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Field Description

Field Description Applies-to Entry (RG 23 D) Choose the RG 23 D entry that has to be

transferred to other location.

The program will calculate the exciseamount based on the selected RG 23 Dentry.

(Note: If the excisable material is transferred from trading to other location, program willcalculate excise on the base of applied document to RG 23 D.)


No. 1159 Transfer-from Code GREEN (Trading Location) Transfer-to Code SILVER (Trading Location) Posting Date 01/04/07 In-Transit Code OUT. LOG.Structure EXCISE Vendor Invoice No . 1216

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(Note: Vendor invoice number is mandatory if the External Doc. No. Mandatory field ischecked in Inventory Setup while receiving the material)


Item No. 70074 Quantity 10 Applies-to Entry (RG 23 D) Select the entry from the list




Navigation:

Warehouse→

History→

Posted Transfer Shipments


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Description Dr/Cr AmountRaw Materials Dr 15,000.00Inventory Adjmt., Raw Mat. Cr 15,000.00Raw Materials Cr 15,000.00Inventory Adjmt., Raw Mat. Dr 15,000.00Raw Materials Dr 1,630.00Cenvat Transferred (Trading) Cr 1,630.00


To see the affect on RG 23D after posting the document with the application, you needto Navigate from Purchase History. Capture the source document number of RG 23 D,which has been applied with transfer order document.

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Navigation:Purchase → History → Navigate

Select RG 23D in the Navigate window and click Show

The program has reversed the source RG 23 D entry in the original document.

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The above window is displaying the detail GL entry as below:

Description Dr/Cr AmountRaw Materials Dr 10,000.00Inventory Adjmt., Raw Mat. Cr 10,000.00Raw Materials Cr 10,000.00Inventory Adjmt., Raw Mat. Dr 10,000.00Raw Materials Cr 1,630.00Cenvat Cr. Receivable(Trading) Dr 1,630.00



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Computation of Excise on Stock Transfer (Trading to Manufacturing Location)

Create a Transfer Order for Trading to Manufacturing Location transfer as per theexample given below:


(Note: If the excisable material is transferred from trading location to other location, theprogram will calculate excise on the base of applied document to RG 23 D)


No. 1160 Transfer-from Code GREEN (Trading Location)Transfer-to Code BLUE (Manufacturing Location)Posting Date 01/04/07 In-Transit Code OUT. LOG. Structure EXCISE


Item No. 70074 Quantity 10

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Applies-to Entry (RG 23 D) Select the entry from the list






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Description Dr/Cr AmountRaw Materials Dr 10,000.00Inventory Adjmt., Raw Mat. Cr 10,000.00

Raw Materials Cr 10,000.00Inventory Adjmt., Raw Mat. Dr 10,000.00Raw Materials Dr 1,630.00Cenvat Transferred (Trading) Cr 1,630.00


To see the affect on RG 23D after posting the document with application, you need toNavigate from Purchase History. Capture the source document number of RG 23 D,which has been applied with transfer order document.

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Select RG 23D in the Navigate window and click Show

The program has reversed the source RG 23 D entry in the original document.

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Description Dr/Cr AmountRaw Materials Dr 10,000.00Inventory Adjmt., Raw Mat. Cr 10,000.00Raw Materials Cr 10,000.00Inventory Adjmt., Raw Mat. Dr 10,000.00Raw Materials Cr 1,630.00Cenvat Cr. Receivable Account Dr 1,630.00


(Note: In case Capital Item is received in manufacturing location, then the program willcreate two excise entries. Fifty percent of excise amount will be available as excisecredit for the current year and fifty percent will transferred to next year as deferredexcise credit)


Select RG 23 A Part II in the Navigate window and click Show.

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Computation of Excise on Stock Transfer (Trading to Manufacturing Location in case of Capital Item)



No. 1146 Transfer-from Code GREEN (Trading Location)Transfer-to Code BLUE (manufacturing Location)Posting Date 01/04/07 In-Transit Code OUT. LOG.Structure EXCISE

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Item No. 70073 Quantity 10 Applies- to Entry (RG 23 D) 73






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Description Dr/Cr AmountRaw Materials Dr 10000Inventory Adjmt., Raw Mat. Cr 10000Raw Materials Cr 10000Inventory Adjmt., Raw Mat. Dr 10000Raw Materials Dr 1630CENVAT Transfer trading Cr 1630




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Description Dr/Cr AmountRaw Materials Dr 10000Inventory Adjmt., Raw Mat. Cr 10000Raw Materials Cr 10000Inventory Adjmt., Raw Mat. Dr 10000Raw Materials Cr 1630Cenvat Cr. Receivable Account Dr 815Cenvat Cr. Deferred Account Dr 815


The program has created two entries as the item is received in manufacturing locationand is a capital Item. Fifty percent of the excise amount will be available as excise creditfor current year and rest of the fifty percent of excise amount will be transferred to nextyear as deferred excise.

Select RG 23 C Part I in the Navigate window and click Show.

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Select RG 23 C Part II in the Navigate window and click Show.

Computation of Excise on Stock Transfer (Manufacturing to Trading Location)


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No. 1147 Transfer-from Code BLUE ( Manufacturing Location) Transfer-to Code GREEN (Trading Location )

Posting Date 01/04/07 In-Transit Code OUT. LOG.Structure EXCISE Vendor Invoice No . 1217

(Note : Vendor invoice number is mandatory if the External Doc. No. Mandatory field ischecked in the Inventory Setup while receiving the material)


Item No. 1100 Quantity 10




Navigation:

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Warehouse → History → Posted Transfer Shipments


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Description Dr/Cr AmountFinished goods Dr 1296.71Inventory Adjmt., Retail. Cr 1296.71Finished goods Cr 1296.71Inventory Adjmt., Retail Dr 1296.71Finished goods Dr 10333.29Unrealized Profit A/C Cr 8703.29Excise payable A/C Cr 1630


Select RG 23 A Part I and click Show.

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Description Dr/Cr AmountFinished goods Dr 1296.71Inventory Adjmt., Retail. Cr 1296.71Finished goods Cr 1296.71Inventory Adjmt., Retail Dr 1296.71Finished goods Cr 10333.29Unrealized Profit A/C Dr 8703.29Excise payable A/C Dr 1630



Note 1: The program will not create the excise deferred entry for excisable capital goodsif the receiving location is a trading location.

Note 2: External document number is mandatory to update the RG 23 D register. If theExternal Doc. No. Mandatory field is unchecked in Inventory Setup then the program willskip the External Document No.

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Captive Consumption

For recording the captive consumption you use the captive consumption form.

Navigation:

Purchase→

Order Processing→

Captive Consumption

Fields Description

Fields DescriptionCost of Production The program will capture the value from

Unit Cost of Item Card as Cost of Production.


Admin. Cost % Mention the administration cost involved inthe cost element of the product that isbeing produced.


Cost of Prod. Incl. Admin Cost The Cost of Prod. Incl. Admin Cost showsthe sum of Cost of Production and Admin.Cost %.


Captive Consumption % The percentage of captive consumptionwill be captured from the inventory setup.


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In the above window press F3 to insert new document and enter the followinginformation in Captive Consumption header:

No. TCAP00025 Transfer-from Code BLUE Transfer-to Code RED (ECC No. is Blank in location card)Posting Date 01/04/07 In-Transit Code OUT. LOG. Structure EXCISE

Enter the following details on the Captive Consumption line:

Item No. 70068 Quantity 10 Cost of Production 1000

Admin. Cost % 10 Cost of Prod. Incl. Admin Cost 1100 (The program populate the value which is sum of Cost of production and Admin. Cost %)

Captive Consumption % 10 (The program will flow the value in this field from Inventory setup)

Transfer price and Amount fields are non editable on transfer order line.


The excise amount calculation will be done in the following way:

Excise Base Amount = [Unit Cost + (Unit Cost * Admin. %) + (Cost Of Prod. Incl. AdminCost * Captive Consumption %)] * Quantity

Excise Base Amount = (1,000 + 100 + 110) * 10Excise Base Amount = 12,100

In the above table the excise has been calculated on 12,100.

On 12100, the program will calculate Excise as 16.30% i.e. 1972.

Post the document as Ship.

(Note: The program will create the shipment and mark the document as Released. Youcan modify the transaction once you re-open the document.)

To receive the produced material for captive consumption in the RED location you needto post the document as received.

(Note : The program will create the receipt and remove the captive consumptiondocument from the Captive Consumption form.)

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The above window displays the affect in G/L Accounts as below:

Description Dr/Cr AmountFinished Goods Dr 10,000.00Inventory Adjmt., Retail Cr 10,000.00Finished Goods Cr 10,000.00Inventory Adjmt., Retail Dr 10,000.00Finished Goods Dr 2,972.00Unrealized Profit Account Cr 1,000.00Excise Payable Account Cr 1,972.00



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Description Dr/Cr AmountFinished Goods Dr 10,000.00Inventory Adjmt., Retail Cr 10,000.00Finished Goods Cr 10,000.00Inventory Adjmt., Retail Dr 10,000.00Finished Goods Dr 1,972.00Inventory Adjmt., Retail Cr 1,972.00Finished Goods Cr 2,972.00Unrealized Profit Account Dr 1,000.00Inventory Adjmt., Retail Dr 1,972.00

In the Red location, the program has load the excise amount on inventory and also notcreated any excise entry.

Note 1: The captive consumption form will display only the captive consumptiontransfer order.

Note 2 : The Captive Consumption % is applied on of the component that requirescalculating the excise in case of captive consumption. The program does not allow topost the document if the Captive Consumption % is not provided in Inventory Setup.

Note 3: The Admin. Cost % is applied on the component that requires calculating theexcise in case of captive consumption. The program does not allow to post thedocument if the Admin. Cost % is not provided on the captive consumption line.

Note 4: The Cost of Production and Admin. Cost % fields are editable on the captiveconsumption line.

Note 5: The receiving location where the produced items are received for captiveconsumption; should not have the location ECC number attached.

Note 6: Use Item Journal to adjust the inventory in the receiving location for theproduced item in case of captive consumption.

Item Journal

The materials; received for the captive consumption in the RED location need to beneeds to be consumed adjusted.

The following setup is required to affect the appropriate inventory adjustment account.

You create a separate General Business Posting Group for the captive consumption.

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Attach the Captive Consumption Account in the General Posting Setup in combination of CAPTIVE and Gen. Bus. Posting Group, and RETIAL and Gen. Prod. Posting Group.

You use the Item Journal to adjust the inventory and affect the inventory ledger according to the setup.

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Navigation:Purchase → Inventory & Costing → Item Journals

You select the Captive in Gen. Bus. Posting Group field to allow the Navision to createthe appropriate GL Entry:

Posting Date 01/04/07 Document No. T00009 Entry Type Negative Adjmt.Item No. 70068 Description FORKLIFT Location Code RED Quantity 10 Gen. Bus. Posting Group CAPTIVE Gen. Prod. Posting Group RETAIL

Post the Item Ledger Entry.

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The above window displays the following affected G/L Accounts:

Description Dr/Cr AmountCaptive Consumption Dr 10,000.00Finished Goods Cr 10,000.00

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Report

Navigation:Financial Management → General Ledger → Report → Excise Reporting →

Captive Consumption

Field Description:

Fields DescriptionStart Date Enter start date, from which you want to

generate the report.

End Date Enter end date, till which you want togenerate the report.

E.C.C. No. Choose the E.C.C. No. for which you wantto generate the captive consumptionreport.

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The program will display the captive consumption report as below:

In the above report, the program is displaying the calculated Cost of Production includingthe Admin. Cost %, Captive Consumption %, Calculated Excise Amount for eachdocument, Daily Balances of Excise Amount, and so on..

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Appendix

Excise Duty Computation on Stock Transfer

In the following scenario, the program will compute the excise duty on stock transfer:

• Stock transfer from manufacturing location to the trading location for the MRPitems

• Stock transfer from manufacturing location to the trading location for the regular items

Stock transfer from manufacturing location to the trading location for item whichis coming under MRP provision of Excise Act

In case stock has transferred from manufacturing location to trading location for the item

which is coming under MRP provision, the excise will be computed by taking theabatement % as defined by the government.

In shipping location, entry will be created in the RG23 part1 if it is a raw material and willbe created in the Daily Stock account if it is a finished stock. In the receiving location(Trading location), entry will be created in the RG23D register.

Example:

Company X is transferring material X with fixed MRP. The government has alloweddeduction by 50% on the excise duty computation. If the item price is Rs. 100 andcompany is making the stock transfer of Quantity 1 from Unit A (manufacturing location)

to Unit B (Trading location) then the stock transfer value would be assessable valuebased on the 50% deduction means Rs. 50 will be the stock transfer price. The financialentries would be (Assuming Excise @10%):

In the books of unit A (Manufacturing location )

The program should update the RG 23 A Part I at Unit A with Quantity 1 and the

program should create the Excise entry for Rs. 5.In the books of unit B (Trading location)

Particulars Debit Rs Credit RsUnit B A/C 55Inventory A/C (Unit A) 50Excise Payable 5

Particulars Debit Rs Credit RsInventory A/C (Unit A) 50Cenvat receivable A/C 5Unit A A/C 55

The program should update the RG 23 D with Rs. 5 and Quantity 1.

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Stock transfer from manufacturing location to the trading location for item whichis not coming under MRP provision of Excise Act

In case stock has transferred from manufacturing location to trading location for the itemwhich is not coming under MRP provision of Excise Act, excise will be computed on thetransaction value.

In shipping location entry will be created in RG23 part1 if it is raw material and will becreated in the Daily Stock account if it is finished stock. In the receiving location (Tradinglocation) entry will be created in the RG23D register.

Example

Company X is transferring material X from Unit A as factory location to the branch office.If the price of the item is Rs. 100, then company will compute the excise of the salesprice and will make the transfer entry.

The financial entries would be as follows (Assuming Excise @10%):

In the books of unit A (Manufacturing location )

The program should update the RG 23 A Part I at Unit A with Quantity 1 and theprogram should create the excise entry for Rs. 10

In the books of unit B (Trading location)

Particulars Debit Rs Credit RsUnit B A/C 110Inventory A/C (Unit A) 100Excise Payable 10

Particulars Debit Rs Credit RsInventory A/C (Unit A) 100Cenvat receivable A/C 10Unit A A/C 110

The program should update the RG 23 D with Rs. 10 and Quantity 1.

Captive Consumption

Computation of Excise duty on Captive consumption:

Captive consumption means goods are not sold but are consumed within the samefactory or another factory of the same manufacturer (Inter unit transfer).

Levy of excise duty on captive consumption :Excise duty is applied on the manufactured goods and duty is liable to pay as soon asgoods are manufactured within the factory. The use of manufactured goods within thefactory is termed as captive consumption.

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Captive consumption may be

• Used as fixed asset• Used as personal consumption/ factory use

Used as fixed asset

If excisable goods are manufactured and are used as fixed assets then the excise dutyis leviable, but as per notification 67/1995 dated 16.03.1995, capital goods (as defined inthe Cenvat Credit Rules) manufactured in a factory and used within the factory of production are exempted from excise duty.

Further, as per explanation 2 to Rule 2(g) of Cenvat Credit Rules, inputs include goodsused in manufacture of capital goods which are further used in the factory of manufacturer .Thus, if capital goods are manufactured and used within the factory,Cenvat Credit can be availed of goods which are used to manufacture such capitalgoods. Moreover no duty will be payable on such capital goods.

Example: Steel trolleys manufactured and used within the factory for storage /carrying of parts isused in relation to manufacture of final product and hence the trolleys will be exemptedfrom duty.

Used as Personal consumption/Factory use :

If the excisable manufactured goods are used either for personal consumption or for office use then excise duty will be leviable on the goods if the goods are marketable inthe above said conditions.

Example: Suppose the cost of the item is RS 1000 and excise amount is 100 then thefollowing accounting entry will pass in the book of account.

Particulars Amount(Rs)Expenses A/C Dr 1100

To, Inventory A/C Cr 1000To, Excise Payable 100

Note: If the excisable goods are transferred from one excisable location to another NonExcisable location for captive consumption then compute the excise duty liability for shipping location and excise duty amount to be loaded on the inventory for the receivinglocation

Example

If the cost of production is based on general principles of costing of a commodity and isRs. 10,000 per unit, then the assessable value of the goods will be Rs. 11,500 per unit.Considering Rs. 11,500 as assessable value, material needs to be transferred to the

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other unit for captive consumption. The financial entries will be as follows (AssumingExcise % applicable at 10%):

In the books of Factory-1

In the books of Factory -2

Particulars Debit Rs Credit Rs

Inventory Adjustment A/c 10115To, Inventory A/C 10000To, Excise Payable A/C 115

Particulars Debit Rs Credit RsInventory A/C (Factory2)(Receiving location

10115

To, Inventory Adjustment A/c 10115

Factory locations -2 update the RG 23 A Part I at Factory Unit 1 with Quantity 1 and theprogram should create the excise entry for Rs. 115. For Factory Unit 2, the programshould update the inventory account. No excise entry will be created for the Factory 2.

Relevant date when goods cleared for captive consumptionIf excisable goods are used within the factory (captive consumption), then the date of removal is the date on which goods are issued for such use within the factory. As per Excise Rule, one Invoice should be prepared per day.

Valuation in case of Captive ConsumptionIn case of captive consumption, valuation shall be done on the basis of cost of production plus 10% (percentage was 15% up to 05.08.2003).

Cost of production is required to be calculated as per Cost Accounting Standard -4(CAS). CAS is issued by the Institute of Cost and works Accountants of India (ICWAI).

Cost of production as per CAS-4

Prime Cost = Direct material cost + Direct labour cost + Direct expensesCost of production = Prime cost + Production overhead + Administration overhead +R&D Cost (Apportioned) + Packing cost

Example:Item A has captive use in the factory. The cost of production of Item A is Rs 1000 andexcise rate is 10% then the excise payable for the item A is RS 110 (10% on the value of (1000+10% of Rs 1000)).

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Microsoft® Business Solutions–Navision® 4.0 – Assessable Value

Computation

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Table of Contents

Overview...............................................................................................................3

Detailed Setup ...................................................................................................3

Comprehensive Functionality ............................................................................3

Setup Required.....................................................................................................4

Excise Setup for MRP .......................................................................................4

Item Card ..........................................................................................................5

Structure ............................................................................................................9

Customer Posting Group ...................................................................................9

Calculation of Excise Duty in case of MRP through Sales Order ....................10


Calculation of Excise, VAT and Charges in case of Price Inclusive of tax through Sales Order ........................................................................................17


Calculation of Excise, VAT and Charges in case of MRP and Price Inclusive of tax through Sales Order ..................................................................................25


Calculation of Excise, VAT and Charges with Line and Invoice Discount in case of MRP and Price Inclusive of tax through Sales Order ..........................31


Calculation of Excise, VAT and Charges with one Line of MRP and Price Inclusive of tax and other line is without MRP and Price Inclusive of Tax through Sales Order. .......................................................................................42

Calculation of Excise Duty in case of MRP through Sales Return Order .........48


Calculation of Excise, VAT and Charges in case of Price Inclusive of tax through Sales Return Order ............................................................................57

Calculation of Excise, VAT and Charges in case of MRP and Price Inclusive of tax through Sales Return Order .......................................................................65


Calculation of Excise, VAT and Charges with Line and Invoice Discount in case of MRP and Price Inclusive of tax through Sales Return Order ..............72

Calculation of Excise, VAT and Charges with one Line of MRP and Price Inclusive of tax and other line is without MRP and Price Inclusive of Tax through Sales Return Order ............................................................................84


Modifications in Line Structure in case of Price Inclusive of Tax through Sales Order ...............................................................................................................90


Appendix.............................................................................................................98

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OverviewThe Assessable Value Computation functionality enables you to compute the exciseduty under the MRP Provision of Excise Act. This functionality helps in the computationof excise duty in case selling price includes all taxes and charges.

Detailed Setup

You should prepare the following setups to enable the Assessable Value Computationfunctionality:


other excise setup.

Structure Define structure to calculate the excise, sales taxand charges amount in case of MRP and PriceInclusive of tax.

Item Card Define MRP Price, Abatement %, and PIT Structure. Also place a check mark in the MRP and PriceInclusive of Tax fields.

Sales Price Define MRP Price, Abatement %, and PIT Structure. Also place a check mark in the MRP and PriceInclusive of tax fields.

Customer Posting Group Define PIT Difference Account No.


Following comprehensive functionalities are covered under Assessable valueComputation:

• Provision to calculate Excise Duty on MRP with Abatement % through the SalesOrder / Invoice / Return Order / Credit Memo.

• Provision to calculate Excise, Sales Tax / VAT / CST, and Charges throughSales Order / Invoice / Return Order / Credit Memo if selling price is inclusive of all taxes.

• Provision of calculate Excise, Sales Tax / VAT / CST, and charges if Discountsare there in case of MRP and Price Inclusive of Tax through Sales Order /Invoice / Return Order / Credit Memo.

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Setup Required

Excise Setup for MRP


In Excise components calculation type a new option as “ % of MRP” has beenintroduced. While calculating Excise on MRP you should select calculation type as “% ofMRP” in the relevant excise components. If you want to select the calculation formula for any of the component then you need to use Excise % as option.

Create the Excise posting setup in case of MRP on the following basis:

Excise Posting Group : GEN Excise Prod. Group : 84.15 Excise Payable Account : 2994 CENVAT Cr. Receivable Account : 2993 CENVAT Cr. Deferred Account : 2996 BED Calculation Type : % of MRP BED % : 10 BED Calculation formula : Blank SED Calculation Type : % of MRP SED % : 2 SED Calculation Formula : Blank AED (GSI) Calculation Type : % of MRP AED (GSI) % : 2 AED (GSI/TTA) Calculation Formula : Blank SAED Calculation Type : % of MRP SAED % : 2 SAED Calculation Formula : Blank ECESS Calculation Type : Excise % ECESS % : 2

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ECESS Calculation Formula : BED Amount SHE CESS Calculation Type : Excise % SHE CESS %: 1 SHE CESS Calculation Formula : BED Amount

Item Card Navigation:Purchase → Planning → Item → Item Card

Fields Description:

MRP tab:


item lies under MRP provision of theExcise Act and excise duty is to becalculated on the basis of MRP.

By placing a check mark in this field theprogram will put a check mark in the MRPfield on the sales line for the particular

item.

MRP Price Mention the MRP price program willcalculate the excise amount.

This field contains the value for per unit of item. By entering the value in this field theprogram will put the same value in theMRP Price field on the sales line for the

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particular item.

Abatement% Mention Abatement % in this field, basedon which excise duty base amount is to beconsidered.

By entering the value in this field theprogram will put the same value in the

Abatement % field on the sales line for theparticular item.

Price Inclusive of Tax Place a check mark in the Price Inclusiveof Tax field in case the selling price isinclusive of all taxes.

Note: when the Price Inclusive of Tax fieldis checked then the program will assumethat the price defined in the Unit Price fieldis the price inclusive of all taxes, and valueof the Unit Price field will get populated inthe Unit Price Incl. of Tax field on the Salesline .

PIT Structure Choose the structure from the look up listfor which price inclusive of taxes isapplicable. You have to define all taxcomponents which are included in theprice, in this structure. The program willcalculate the excise duty and other components of taxes by making back wardcalculation.

This structure will get populated on thesales line in case the Price Inclusive of Taxfield is checked. If any charge is defined inthe structure for a line then the chargeamount is applicable for that line only andit will not be divided among the lines.

Unit Price Mention the unit price of the item which isalso the unit price inclusive of tax.

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Sales Price

Navigation:Purchase → Planning → Item → Item Card → Sales → Prices

Fields Description


item lies under MRP provision of theExcise Act and excise duty is to becalculated on the basis of MRP

By placing a check mark in this field theprogram will put a check mark in MRP fieldin sales line for the particular item.

MRP Price Mention the MRP price in this field, basedon which the will calculate the exciseamount.

This field contains the value for per unit of item. By entering the value in this field theprogram will put the same value in theMRP Price field on the sales line for theparticular item.

Abatement% Mention Abatement % in this field, based

on which excise duty base amount is to beconsidered.

By entering the value in this field theprogram will put the same value in the

Abatement % field on the sales line for theparticular item.

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Price Inclusive of Tax Place a check mark in the Price Inclusiveof Tax field in case the selling price isinclusive of all taxes.

Note: when the Price Inclusive of Tax fieldis checked then the program will assumethat the price defined in the Unit Price fieldis the price inclusive of all taxes, and valueof the Unit Price field will get populated inthe Unit Price Incl. of Tax field on the Salesline .

PIT Structure Choose the structure from the look up listfor which price inclusive of taxes isapplicable. You have to define all taxcomponents which are included in theprice, in this structure. The program willcalculate the excise duty and other components of taxes by making back wardcalculation.

This structure will get populated on thesales line in case the Price Inclusive of Taxfield is checked. If any charge is defined inthe structure for a line then the chargeamount is applicable for that line only andit will not be divided among the lines.

Unit Price Mention the unit price of the item which isalso the unit price inclusive of tax.

Note: The program will work according to the duration defined in the sales price line

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Structure

Navigation:Financial Management → Setup → Structure → Structure

Field Description:

Field DescriptionInclude PIT Calculation Place a check mark in this field if you want

to include the particular tax in PIT (priceinclusive of tax) calculation.

If the Price Inclusive of Tax field on thesales line is checked then in structure anyone structure order detail should have

include PIT calculation field true.

Customer Posting Group

Navigation:Financial Management → Setup → Posting Groups → Customer

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Field Description

Field DescriptionPIT Difference Acc. Choose the PIT Difference Account in this

field from the lookup list.

The program will debit or credit the valuesin this account which will arise whileposting the sales transactions related toprice inclusive of tax.

Note: while calculating the backwardcalculation the program may find somedifference in the total amount. Theprogram will check the same and post thisamount in to separate account.

Calculation of Excise Duty in case of MRP through Sales Order


Fields Description :


field either from the Item Card or from theSales Price Card.

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Fields DescriptionThis field is non editable.

MRP Price The program populates the value in thisfield either from the Item Card or from theSales Price Card.


Abatement% This field will be populated by the programfrom item card or sales price card.


To calculate excise, fill the fields in the Sales Order form as follows:

On the Header:

Buy from Vendor No: 10000 Structure: Excise

On the Line:

Type: Item No.: 1000

Description: Bicycle Quantity: 10 Unit of Measure code : PCS Location: blue MRP: Check Mark (The program will by default populate

this value either from the Item Card or from the Sales Price Card)

MRP Price: 1000 (The program will by default populate this value either from the Item Card or from the Sales Price Card)

Abatement %: 20(The program will by default populate this value either from the Item Card or from the Sales Price Card)

Unit Price Excl. VAT : 1000 Line Amount Excl. VAT : 10000

Calculate Structure


Post the Order.

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G/L Entry

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Particulars Type Amount(Rs)Customer DR 11304Excise Payable CR 1304Sales CR 10000

Calculation of excise on the following basis :




• 10000*20% = 2000. 10000-2000 = 8000

• On the value of 8000, the program will calculate excise @ 16.30%.

• 8000*16.30% = 1304. Excise Amount is 1304 and Excise base amount is 8000.

The program will also create excise entry with excise base amount as 8000.

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Excise Entry

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In Posted Shipment the program will create RG 23 A Part I entry with the Quantity soldas 10.

Note 1: You can post the transaction from the Sales Invoice

Note 2: You can also post the same transaction for capital Item while keeping a checkmark in the Claim Deferred Excise field.

Note 3: If MRP field is checked on the sales line then Calculation Type in the ExcisePosting setup should have % of MRP with the combination of blank calculation formula.In case of calculating the ECESS and SHE CESS, Calculation type should be Excise %.

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Note 4: In case of MRP, you can also adjust the excise payable amount through theDirect Debit to PLA/RG functionality.

Note 5: In case of MRP, the program will not allow the user to post the sales transactionif a check mark is placed in the Trading field on the sales header.

Note 6: In case of MRP, the program will not allow the user to post the sales transactionif a check mark is placed in the CVD field in the Structure.

Note 7: In case of MRP, the program will not allow the user to change the excisecomponents on the sales line after calculating structure.

Note 8: In case of MRP, you can also post the transaction related to Free Supply.

Note 9: You can choose the different price with MRP and Abatement % on the sales linethrough “Get Price” option available in the Functions menu button of SalesOrder/Invoice; in case of price difference based on the time duration.

Note 10: If Abatement % is zero, then the program will not consider any Abatement % inthe excise calculation.


Note 12 : If the Structure includes excise, sales tax / VAT / CST, and charges, then theprogram will calculate excise on MRP and then will calculate sales tax/VAT/CST andcharges based on the formula defined in the Structure.

Note 13 : Calculation on MRP can only be done for the Type “Item” in Sales

Order/Invoice.

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Calculation of Excise, VAT and Charges in case of Price Inclusive of tax through Sales Order

Navigation:


Order Processing→

Orders

Fields Description:

Fields DescriptionPIT Structure The program populates the value in this



Price Inclusive of Tax The program populates the value in thisfield either from the Item Card or from theSales Price Card.


Unit Price Inclusive of Tax The program populates the value in thisfield either from the Item Card or from theSales Price Card.


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To calculate excise, VAT and charges, fill the fields in the Sales Order form asfollows:

On the Header:

Buy from Vendor No: 10000 Location: Blue

On the Line:


Description: Front Wheel Quantity: 10 Unit of Measure code : PCS Location: blue Price Inclusive of Tax: True (The program will by default populate this

value either from the Item Card or from the Sales Price Card)

PIT Structure: PIT- EX/VAT (The program will by default populate this value either from the Item Card or from the Sales Price Card)

Unit Price Inclusive of Tax: 1000(The program will by default populate this value either from the Item Card or from the Sales Price Card)

Unit Price Excl. VAT : Blank Line Amount Excl. VAT : Blank

The Unit Price Excl. VAT field and Line Amount Excl. VAT field will be blank beforecalculating structure.

Calculate Structure

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After calculating Structure, the program will populate the values in Unit Price Excl. VATand Line Amount Excl. VAT fields.

The program calculates the Unit Price Excl. VAT, multiply unit price with quantity, andthen will populate the amount in the Line Amount Excl. VAT field.

Sales Order line

Unit Price Excl. VAT : 694.791Line Amount Excl. VAT : 6,947.91

Press F9 to view the Sales Order Statistics.

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In the Sales Order Statistics window, the program will show the values in the Excise Amount, Tax (VAT) Amount and Charges Amount fields.

Post the Order.

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G/L Entry


Particulars Type Amount(Rs)Customer DR 10000Excise Payable CR 1133Sales Tax CR 1010Freight CR 909.09Sales CR 6947.91

Calculation of excise, VAT and charges on the following basis :Excise % is 16.30, VAT % is 12.50, and Charges % is 10.

In the Structure, excise will be calculated on base value, VAT will be calculated on basevalue plus excise amount, and charges will be calculated based on the sum of basevalue, excise amount, and VAT amount.


• On 6947.91, the program has calculated 16.30% as excise.

• 6947.91*16.30% = 1133 Excise Amount (After rounding nearest to Rupee 1)

• On 8080.91 (6947.91+1133), the program has calculated 12.50 as VAT

• 8080.91*12.50% = 1010 VAT Amount (After rounding nearest to Rupee 1)

• On 9090.91 (8080.91+1010), the program has calculated 10% as Charges

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• 9090.91*10% = 909.09 Charges Amount

• Now Excise Amount is 1133, VAT Amount is 1010 and Charges Amount is909.09

The program will create excise entry with excise base amount as 6947.91 and will alsocreate detailed tax entry for VAT amount.

In Posted Shipment, the program will create RG 23 A Part I entry with Quantity sold as10.


Note 2: You can post the same transaction for capital Item with a check mark in theClaim Deferred Excise field.

Note 3: In case of Price Inclusive of Tax, you can also adjust the excise payable amountthrough the Direct Debit to PLA/RG functionality.

Note 4: In case of price Inclusive of tax, the program will not allow you to post the salestransaction if a check mark is placed in the Trading field on the sales header.

Note 5: In case of Price Inclusive of Tax in structure Include PIT Calculation field shouldbe checked for at least one of the structure detail. If there are three calculation orders inthe structure and you place a check mark in the third calculation order, thenautomatically above two will update this field with a check mark. And if you remove thecheck mark in first calculation order then the program will remove the check marks insecond and third calculation orders.

Note 6: In case of price Inclusive of tax, the program will not allow you to post the salestransaction if a check mark is placed in the CVD field in the structure.

Note 7: The program will not allow the user to change the excise components on thesales line after calculating structure in case of Price Inclusive of tax.

Note 8: In case of price Inclusive of tax, the program will not allow using the Free Supplyfunctionality.

Note 9: You can also choose the different price with PIT Structure on the sales linethrough “Get Price” option available in the Functions menu button of Sales Order /Invoice.

Note 10: If a check mark is placed in the Price Inclusive of Tax field on the sales linesthen it is mandatory to have PIT Structure and value in Unit Price Inclusive of Tax fieldon the sales line.

Note 11: In case of price Inclusive of tax, you can not use Export or Deemed Export andVAT Exempted functionality.

Note 12 : The program will only include the particular tax in Price Inclusive of Tax againstwhich Include PIT Calculation field is checked in the structure.

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Note 13: You can calculate excise, sales tax / VAT / CST and charges in case of PriceInclusive of Tax.

Note 14: In case charges are defined in structure and Structure is selected in PITStructure field on the sales line. In this case the program will not divide the chargesamount in multiple lines.

Note 15: In case of Price Inclusive of Tax, you can view the Structure for that particular PIT line by clicking Line menu button and selecting the Structure menu item.

After clicking Structure menu item the program will open the Structure Order Details PITwindow.

The same can be viewed from the posted invoice.

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Note 16 : In case of Price Inclusive of Tax, you can also calculate VAT with StandardDeduction % through Sales Order/Invoice.

Note 17: Price Inclusive of Tax can only be done for Type “Item” on the SalesOrder/Invoice.

Note 18: If a check mark is placed in the Price Inclusive of Tax field on the sales line,then the program will not allow the user to enter value manually in Unit Price Excl. VATand Line Amount Exc. VAT fields.

Calculation of Excise, VAT and Charges in case of MRP and Price Inclusive of tax through Sales Order


Fields Description:






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MRP The program populates the value in thisfield either from the Item Card or from theSales Price Card.




Abatement% The program populates the value in thisfield either from the Item Card or from theSales Price Card.


To calculate excise, VAT and Charges, fill the fields in the Sales Order form asfollows:

On the Header:


On the Line:


Description: Bicycle Quantity: 10 Unit of Measure code : PCS Location: blue Price Inclusive of Tax: Check Mark (The program will by default populate




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MRP: Check Mark (The program will by default populate this value either from the Item Card or from the Sales Price Card)

MRP Price: 1000(The program will by default populate this value either from the Item Card or from the Sales Price Card)



The Unit Price Excl. VAT and Line Amount Excl. VAT fields will be blank beforecalculating structure.

Calculate Structure

After calculating structure, the program will populate the values in Unit Price Excl. VATand Line Amount Excl. VAT fields.

The program will calculate Unit Price excl. VAT, multiply unit price with quantity, andthen will populate the amount in the Line Amount Excl. VAT field.

Sales Order line


Press F9 to view Sales Order Statistics

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In the Sales Order Statistics window, the program will show the Excise Amount, Tax(VAT) Amount and Charges Amount.

Post the Order.

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G/L Entry


Particulars Type Amount(Rs)Customer DR 10000Excise Payable CR 1304Sales Tax CR 1010Freight CR 909.09Sales CR 6776.91

Calculation of Excise, VAT and Charges on the following basis :Excise % is 16.30, VAT % is 12.50 and Charges % is 10.

In Structure, the excise will be calculated on base value, VAT will be calculated basedon the sum of base value and excise amount, and charges will be calculated based onthe sum of base value, excise amount and VAT amount.

Sales Order line


In this case Excise will be calculated on MRP.




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• 10000*20% = 2000. 10000-2000 = 8000



• On 8080.91 (6,776.91+1304), the program has calculated 12.50 as VAT

• 8080.91*12.50% = 1010, VAT Amount (After rounding nearest to Rupee 1)


• 9090.91*10% = 909.09 = Charges Amount


The program will also create excise entry with excise base amount as 8000 and will alsocreate detailed tax entry for VAT amount.

In Posted Shipment, the program will create RG 23 A Part I entry with Quantity sold as10.

Note 1: You can also post the transaction from the Sales Invoice.


Calculation of Excise, VAT and Charges with Line and Invoice

Discount in case of MRP and Price Inclusive of tax through Sales Order


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Field Description

On the Sales Header

Field DescriptionCal. Inv. Discount (%) Place a check mark in this field to calculate

Invoice Discount in case of Price Inclusiveof Tax.

If this field is checked then you can not useCalculate Invoice Discount option availablein functions menu button on salesorder/invoice.


On the Header:


Cal. Inv. Discount (%): Check Mark (In the Customer Card 10% is defined as Invoice Discount)

On the Line:


Description: Bicycle Quantity: 10 Unit of Measure code : PCS Location: blue

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Price Inclusive of Tax: Check Mark (The program will by default populate this value either from the Item Card or from the Sales Price Card)






Unit Price Excl. VAT : Blank Line Amount Excl. VAT : Blank (-1000) after entering the value in line

Discount % field) Line Discount %: 10

Calculate Structure

After calculating Structure, the program will populate the values in the Unit Price Excl.VAT and Line Amount Excl. VAT fields.

The program will calculate Unit Price excl. VAT, multiply unit price with quantity, andpopulate the amount in the Line Amount Excl. VAT field.

Sales Order line

Unit Price Excl. VAT : 708.695

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Line Amount Excl. VAT : 6,086.95


In Sales Order Statistics, the program will show the Excise Amount, Tax (VAT) Amountand Charges Amount.

Note: In sales order statistics Inv. Discount Amount field is non editable in case of PriceInclusive of tax.

Post the Order.

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G/L Entry


Particulars Type Amount(Rs)Customer DR 8391Excise Payable CR 1304Sales Tax CR 848Freight CR 763.03

Sales CR 7086.95Discount Granted DR 1000Discount Granted DR 608.70PIT Difference A/C DR 1.98Invoice Rounding DR 0.30

In this case the program will debit the PIT Difference Account with the value 1.98.

Calculation of excise, VAT and charges on the following basis :

Excise % is 16.30, VAT % is 12.50 and Charges % is 10.


Sales Order line


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Line Amount Excl. VAT : 6,086.95 In this case line discount is 1000 and invoice discount is 608.70.

In this case excise will be calculated on MRP.


• Total MRP price is 10000 (1000*10).


• 10000*20% = 2000. 10000-2000 = 8000.



• On 6,782.25 (line amount – invoice discount + excise amount) i.e. (6,086.95 -608.70 + 1304 ), the program has calculated 12.50 as VAT.

• 6,782.25 *12.50% = 848 =VAT Amount (After rounding nearest to Rupee 1)

• On 7630.25 (6,782.25+848), the program has calculated 10% as Charges

• 7630.25 *10% = 763.03 = Charges Amount

• Now Excise Amount is 1304, VAT Amount is 848 and Charges Amount is 763.03

The program will create excise entry with excise base amount as 8000 and will alsocreate Detailed Tax Entry for VAT Amount.

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Excise Entry

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Detailed Tax Entry

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In Posted Shipment the program will create RG 23 A part I entry with Quantity sold as10.



Note 3: In case of PIT, the program will calculate Invoice Discount if the Cal. Inv.Discount (%) field is checked on the sales header. In this case you can not useCalculate Invoice Discount functionality from the Functions menu button in SalesOrder/Invoice.

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Note 4: Incase PIT Invoice Discount Amount field in the Sales Order Statistics is noneditable.

Note 5: Take a case when any order/invoice has multiple lines, in which Price Inclusiveof Tax field is checked for some lines and unchecked for some lines. In this case if youwant to calculate invoice discount, then you can only calculate invoice discount byplacing a check mark in Cal. Inv. Discount (%) field on the sales header.

Calculation of Excise, VAT and Charges with one Line of MRP and Price Inclusive of tax and other line is without MRP and Price Inclusive of Tax through Sales Order.



On the Header:


Structure: PIT- EX/VAT (for calculation of Excise, VAT and Charges)

On the First Line:



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Price Inclusive of Tax: Check Mark (The program will by default populate this value either from the Item Card or from the Sales Price Card)


Unit Price Inclusive of Tax: 1000((The program will by default populate this value either from the Item Card or from the Sales Price Card)

MRP: Check Mark ((The program will by default populate this value either from the Item Card or from the Sales Price Card)




On the Second Line:


Description: Rim Quantity: 10 Unit of Measure code : PCS Location: blue Unit Price Excl. VAT : 1000

Line Amount Excl. VAT : 10000

Calculate Structure

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Sales Order line




Post the Order.

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G/L Entry


Particulars Type Amount(Rs)Customer DR 24392Excise Payable CR 1630Excise Payable CR 1304Freight CR 2217.49Sales Tax CR 2464

Sales CR 16776.91Invoice Rounding DR 0.40




For the First Line

Sales Order line



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• 10000*20% = 2000. 10000-2000 = 8000






• 9090.91*10% = 909.09 = Charges Amount


For the Second Line

Line Amount is 10000

•

On 10000, the program has calculated excise @ 16.30%.• 10000*16.30% = 1630 = Excise Amount

• On 11630 (10000+1630), the program has calculated VAT @ 12.50%

• 11630*12.50% = 1454 = VAT Amount.

• On 13084 (11630+1454), the program has calculated charges @ 10%

• 13084*10% = 1308.40 = Charges Amount.


The program will also create two excise entries and two detailed tax entries.

In Posted Shipment the program will create RG 23 A part I entries with Quantity sold as10.

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Note 2: You can also post the same transaction for capital Item.

Note 3: In this case you can define the same structure as line structure and header structure.

Calculation of Excise Duty in case of MRP through Sales Return Order


Fields Description:






Abatement% The program populates the value in this

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Fields Descriptionfield either from the Item Card or from theSales Price Card.


To calculate excise, fill the fields in the Sales Return Order form as follows:

On the Header:

Buy from Vendor No: 10000 Structure: Excise

On the Line:


Description: Bicycle Quantity: 10 Unit of Measure code : PCS Location: blue MRP: Check Mark (The program will by default populate




Unit Price Excl. VAT : 1000 Line Amount Excl. VAT : 10000

Calculate Structure



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G/L Entry


Particulars Type Amount(Rs)Sales DR 10000CENVAT Cr Receivable

DR 1304

Customer CR 11304

Calculation of excise on the following basis :




• 10000*20% = 2000. 10000-2000 = 8000




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Excise Entry

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In the Posted Return Receipt the program will create RG 23 A Part I & II entries.

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RG 23 A Part II

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Note 1: You can post the transaction from the Sales Credit Memo.

Note 2: You can also post the same transaction for capital Item

Note 3: If MRP field is checked on the sales line then Calculation Type in the ExcisePosting setup should have % of MRP with the combination of blank calculation formula.In case of calculating the ECESS and SHE CESS, Calculation type should be Excise %.

Note 4: In case of MRP, the program will not allow you to post the sales transaction if acheck mark is placed in the Trading field on the sales header in case of MRP.

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Note 5: In case of MRP, the program will not allow you to post the sales transaction if acheck mark is placed in the CVD field in structure.

Note 6: In case of MRP, the program will not allow the user to change the excisecomponents on the sales line after calculating structure.

Note 7: If Abatement % is zero, then the program will not consider any Abatement % inthe excise calculation...


Note 9 : If the Structure includes excise, sales tax / VAT / CST, and charges, then theprogram will calculate excise on MRP and then will calculate sales tax/VAT/CST andcharges based on the formula defined in the Structure.

Note 10 : Calculation on MRP can only be done for the Type “Item” in the sales ReturnOrder/Credit Memo.

Calculation of Excise, VAT and Charges in case of Price Inclusive of tax through Sales Return Order


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Fields Description:








To calculate excise, VAT and Charges, fill the fields in the Sales Return Order formas follows:

On the Header:


On the Line:


Description: Front Wheel Quantity: 10 Unit of Measure code : PCS Location: blue Price Inclusive of Tax: Check Mark (The program will by default populate





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Calculate Structure

After calculating structure, the program will populate the values in the Unit Price Excl.VAT and Line Amount Excl. VAT fields.



Press F9 to view the Sales Return Order Statistics.

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In the Sales Return Order Statistics window, the program will show the Excise Amount,Tax (VAT) Amount and Charges Amount.


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Navigation:Sales & Marketing → History → Posted Credit Memo .

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G/L Entry


Particulars Type Amount(Rs)Sales DR 6947.91Sales tax DR 1010CENVAT Cr.Receivable

DR 1133

Freight DR 909.09Customer CR 10000




Sales Return Order line


Line Amount Excl. VAT:

6,947.91

• On 6947.91, the program has calculated 16.30% as Excise.

• 6947.91*16.30% = 1133 = Excise Amount (After rounding nearest to Rupee 1)

• On 8080.91 (6947.91+1133), the program has calculated 12.50 as VAT

• 8080.91*12.50% = 1010 = VAT Amount (After rounding nearest to Rupee 1)

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• 9090.91*10% = 909.09 =Charges Amount


The program will also create Excise entry with excise base amount as 6947.91 and alsocreate Detailed Tax Entry for VAT Amount.

In Posted Return Receipt the program will create RG 23 A part I & II entries.

Note 1: You can also post the transaction from the Sales Credit Memo.

Note 2: You can also post the same transaction for the capital Item.

Note 3 In case of price Inclusive of tax, the program will not allow you to post the salestransaction if a check mark is placed in the Trading field on the sales header.

Note 4: In case of Price Inclusive of Tax in structure Include PIT Calculation field shouldbe checked for at least one of the structure detail. If there are three calculation orders inthe structure and you place a check mark in the third calculation order, thenautomatically above two will update this field with a check mark. And if you remove thecheck mark in first calculation order then the program will remove the check marks insecond and third calculation orders.

Note 5 The program will not allow the user to post the sales transaction if CVD ischecked in structure in case of Price Inclusive of tax.

Note 6: The program will not allow the user to change the excise components on salesline after calculating structure in case of Price Inclusive of tax.

Note 7: If Price Inclusive of Tax is checked on sales lines then it is mandatory to havePIT Structure and value in Unit Price Inclusive of Tax field on sales line.

Note 8: In case of Price Inclusive of VAT, You can not use the Export or Deemed Exportand VAT Exempted functionality.

Note 9 : The program will only include the particular tax in Price Inclusive of Tax againstwhich Include PIT Calculation field is checked in structure.

Note 10: In case of Price Inclusive of VAT, You can calculate Excise, Sales tax/ VAT/CST and Charges.

Note 11: In case charges are defined in structure and Structure is selected in the PITStructure field on the sales line. In this case the program will not divide the chargesamount in multiple lines.

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Note 12: In case of Price Inclusive of Tax user can view the Structure for that particular PIT line by clicking Line menu button and click Structure menu item.

After clicking the Structure menu item the program will open the Structure Order DetailsPIT.

The same can be viewed from the Posted Credit Memo.

Note 13 : In case of Price Inclusive of Tax, you can also calculate VAT with StandardDeduction % through the Sales Return Order/Credit Memo.

Note 14: Price Inclusive of Tax can be only done for the Type “Item” on the SalesReturn Order/Credit Memo.

Note 15: If Price inclusive of tax field is checked on the sales line then the program willnot allow the user to enter the value manually in the Unit Price Excl. VAT and Line

Amount Exc. VAT fields.

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Calculation of Excise, VAT and Charges in case of MRP and

Price Inclusive of tax through Sales Return Order Navigation:Sales & Marketing → Order Processing → Return Orders

Fields Description:





This field is editable..


This field is editable.MRP The program populates the value in this

field either from the Item Card or from the

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Sales Price Card.




Abatement% The program populates the value in thisfield either from the Item Card or from theSales Price Card.



On the Header:


On the Line:


Description: Bicycle Quantity: 10 Unit of Measure code : PCS Location: blue Price Inclusive of Tax: Check Mark (The program will by default populate






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Calculate Structure





Press F9 to view Sales Return Order Statistics window.

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In Sales Return Order Statistics window, the program will show the Excise Amount, Tax(VAT) Amount and Charges Amount.


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G/L Entry


Particulars Type Amount(Rs)Sales DR 6776.91Sales tax DR 1010CENVAT Cr.Receivable

DR 1304

Freight DR 909.09Customer CR 10000









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• 10000*20% = 2000. 10000-2000 = 8000

• On 8000 the program will calculate excise @ 16.30%.


• On 8080.91 (6,776.91+1304) the program has calculated 12.50 as VAT


• On 9090.91 (8080.91+1010) the program has calculated 10% as Charges

• 9090.91*10% = 909.09 = Charges Amount


The program will also create excise entry with excise base amount as 8000 and alsocreate Detailed Tax Entry for VAT Amount.

In Posted Return Receipt the program will create RG 23 A part I & II entries.


Note 2: You can also post the same transaction for capital Item.

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Calculation of Excise, VAT and Charges with Line and Invoice Discount in case of MRP and Price Inclusive of tax through Sales Return Order


Field Description

On the Sales Header

Field DescriptionCal. Inv. Discount (%) Place a check mark in this field to calculate

invoice discount in case of Price Inclusiveof Tax.

If this field is checked then you can not useCalculate Invoice Discount option availablein Functions menu button in the SalesReturn Order/Credit Memo.


On the Header:


Cal. Inv. Discount (%): Check Mark (In the Customer Card 10% is defined as Invoice Discount)

On the Line:

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Description: Bicycle Quantity: 10 Unit of Measure code : PCS

Location: blue Price Inclusive of Tax: Check Mark (The program will by default populate







Unit Price Excl. VAT : Blank Line Amount Excl. VAT : Blank (-1000) after entering the value in line

Discount % field) Line Discount %: 10

Calculate Structure

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Unit Price Excl. VAT : 708.695 Line Amount Excl. VAT : 6,086.95

Press F9 to view Sales Return Order Statistics


Note: In the Sales Order Statistics window, Inv. Discount Amount field is non editable in

case of Price Inclusive of tax.


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Navigation:Sales & Marketing → History → Posted Credit Memo.

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G/L Entry


Particulars Type Amount(Rs)Customer CR 8391CENVAT Cr.Receivable

DR 1304

Sales Tax DR 848Freight DR 763.03Sales DR 7086.95

Discount Granted CR 1000Discount Granted CR 608.70PIT Difference A/C CR 1.98Invoice Rounding CR 0.30

In this case the program will credit the PIT Difference Account with 1.98.






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In this case line discount is 1000 and Invoice discount is 608.70

In this case excise will be calculated on MRP:


• Total MRP price is 10000 (1000*10).


• 10000*20% = 2000. 10000-2000 = 8000.



• On 6,782.25 (line amount – invoice discount + excise amount) i.e. (6,086.95 -608.70 + 1304 ) the program has calculated 12.50 as VAT.

• 6,782.25 *12.50% = 848 = VAT Amount (After rounding nearest to Rupee 1)

• On 7630.25 (6,782.25+848), the program has calculated 10% as Charges

• 7630.25 *10% = 763.03 = Charges Amount

• Now Excise Amount is 1304, VAT Amount is 848 and Charges Amount is 763.03

The program will also create excise entry with excise base amount as 8000 and will alsocreate Detailed Tax Entry for VAT Amount.

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Excise Entry

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Detailed Tax Entry

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In Posted Return Receipt, the program will create RG 23 A Part I & II entries

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Note 3: In case of PIT, the program will calculate the invoice discount if the Cal. Inv.Discount (%) field is checked on the sales header. In this case you can not use theCalculate Invoice Discount functionality from Functions menu button in the Sales ReturnOrder/Credit Memo.

Note 4: Incase of PIT, Invoice Discount Amount field in Sales Return Order Statistics isnon editable.

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Note 5: If any Return Order/Credit Memo has multiple lines, in which for some linesPrice Inclusive of tax field is checked and unchecked for some lines. In this case if youwant to calculate invoice discount then you can only calculate invoice discount byplacing a check mark in the Cal. Inv. Discount (%) field on the sales header.

Calculation of Excise, VAT and Charges with one Line of MRP and Price Inclusive of tax and other line is without MRP and Price Inclusive of Tax through Sales Return Order



On the Header:


Structure: PIT- EX/VAT (for calculation of Excise, VAT and Charges)

On the First Line:



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Price Inclusive of Tax: Check Mark ((The program will by default populate this value either from the Item Card or from the Sales Price Card)







On the Second Line:


Description: Rim Quantity: 10 Unit of Measure code : PCS Location: blue Unit Price Excl. VAT : 1000

Line Amount Excl. VAT : 10000

Calculate Structure

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The program will calculate Unit Price excl. VAT, multiply unit price with quantity, andthen will populate the amount in the Line Amount Excl. V AT field.

For the First Line


Press F9 to view the Sales Return Order Statistics window.

In the Sales Return Order Statistics window, the program will show the Excise Amount,Tax (VAT) Amount and Charges Amount.


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G/L Entry


Particulars Type Amount(Rs)Customer CR 24392CENVAT Cr.Receivable

DR 1630

CENVAT Cr.Receivable

DR 1304

Freight DR 2217.49Sales Tax DR 2464Sales DR 16776.91Invoice Rounding CR 0.40




For the First Line



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• 10000*20% = 2000. 10000-2000 = 8000




• 8080.91*12.50% = 1010 = VAT Amount (After rounding nearest to Rupee 1)


• 9090.91*10% = 909.09 = Charges Amount


For the Second Line

Line Amount is 10000

• On 10000, the program has calculated excise @ 16.30%.

• 10000*16.30% = 1630 Excise Amount

• On 11630 (10000+1630), the program has calculated VAT @ 12.50%

• 11630*12.50% = 1454 = VAT Amount.

• On 13084 (11630+1454), the program has calculated charges @ 10%

• 13084*10% = 1308.40 = Charges Amount.


The program will also create two excise entries and two detailed tax entries.

In Posted Return Receipt the program will create RG 23 A Part I & II entries.

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Note 3: In this case the user can define the same structure as line structure and header structure.

Modifications in Line Structure in case of Price Inclusive of Tax through Sales Order

In the Structure window below the Excise, Sales tax and Charges are defined.

For the Calculation Order 1 & 2, Include PIT Calculation field has a check mark.

For the Calculation Order 3, Charges Calculation Type is Fixed, Calculation Value is100, and Include PIT Calculation field is unchecked.

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On the Header:


On the Line:


Description: Front Wheel Quantity: 10 Unit of Measure code : PCS Location: blue Price Inclusive of Tax: Check Mark (The program will by default populate


PIT Structure: PIT- ALL (The program will by default populate this value either from the Item Card or from the Sales Price Card)




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Now clicks the Line menu button and select Structure menu item.

The program will open the Structure Order Details PIT window.

In this window, the Calculation Value field is editable and you can make the changes inthe existing values for the line against which the Include PIT Calculation field isunchecked.

Change the calculation value from 100 to 200 for the third line against which the IncludePIT Calculation is unchecked.

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Close the form

Calculate Structure



Sales Order line


Press F9 to view the Sales Order Statistics window.

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In Sales Order Statistics window, the program will show the Excise Amount, Tax (VAT) Amount and Charges Amount.

The program has calculated charges amount as 200 that is changed earlier in theStructure Order Details PIT though it was 100 in the Structure Masters.

Post the Order.

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G/L Entry


Particulars Type Amount(Rs)Customer DR 10200Excise Payable CR 1246Sales Tax CR 1111Freight CR 200Sales CR 7643

Calculation of excise, VAT and charges on the following basis :Excise % is 16.30; VAT % is 12.50 and Charges is 200.

In Structure, the excise will be calculated on base value, VAT will be calculated basedon the sum of base value and excise amount, and charges are fixed with value as: 200.

Sales Order line


•

On 7643, the program has calculated 16.30% as Excise.• 7643*16.30% = 1246 = Excise Amount (After rounding nearest to Rupee 1)

• On 8889 (7643+1246), the program has calculated 12.50 as VAT

• 8889*12.50% = 1111 = VAT Amount (After rounding nearest to Rupee 1)

• Charges Amount is fixed as 200.

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• Now Excise Amount is 1246, VAT Amount is 1111 and Charges Amount is 200

The program will create excise entry with excise base amount as 7643 and will alsocreate Detailed Tax Entry for VAT Amount.

In the Posted Shipment, the program will create RG 23 A part I entry with Quantity soldas 10.

Note 1: You can also post the transaction from the Sales Invoice/Return Order/CreditMemo.

Note 2: You can also post the same transaction for capital Item with a check mark in theClaim Deferred Excise field.

Note 3: You can also change the calculation value for all calculation type. For example:Percentage, Fixed Value and Amount per Quantity.

Note 4: You can only change the calculation value for that calculation order line againstwhich Include PIT Calculation field is unchecked.

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Appendix

Case 1 – MRP

Take an example of product A, which has been sold to the customer X for Rs100 per

piece. MRP printed on the product pack is Rs 200, abatement % is 40%, excise rate is10%, and VAT rate is 10%.

In this case excise computation will be as follows:

Particulars Amount (Rs)Basic Price 100Excise duty 12 (Rs200-(40%of200))*10/100)VAT 11.2(100+12)*10/100)Total 123.20

Case 2 – PIT

Product: APrice inclusive of taxes: Rs200Excise: 10%VAT: 5%

Excise amount will be computed by making the following formula:

Lets price is” X” on which excise duty will be calculated:

Rs 200 = X + 10% of X + 5% on (X +10% on X)200 = X+.100X + .05 (1.1X)200 = X+.100X +.055X200=1.155X

X = 200/1.155 = 173.16

Now excise amount will be =10% on 173.16 =17.32VAT will be5% on (173.16+17.32) = 9.52

Now the invoice will be as follows:Basic price = 173.16Excise = 17.32VAT = 9.52Total= 200.00

Case 3 – MRP + PIT

Product: AMRP: Rs 200

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Price inclusive of taxes: Rs200 Abatement: 40%Excise: 10%Excise amount will be: 10% of 120 (200-40%of200) =12

Now the invoice will be as follows:

Basic price = 188Excise = 12Total= 200

Case 4

Take another example of products A and B, which have been sold to Customer XYZ.Product A’s selling price is inclusive of tax and product B is without price inclusive of tax.Details of selling price and defined structure for price inclusive of tax are given below:

Selling price of A = Rs 100 (including taxes)Selling price of B = Rs 200 (excluding taxes)Structure 1 = Price inclusive tax structure for product A-includes (Excise, VAT, chargesRs 10)Structure 2 = for product B includes (Excise, VAT)Excise rate is 10 % and VAT rate is 5 %.

Now the program will consider structures defined on the line for price inclusive tax,means Structure I for product A and Structure 2 for product B.

Excise and VAT calculated for the product are as follows:

For product A

Lets price will be” X” on which excise duty will be calculated.Rs 100 = X+ (10% of X) + 5%of (X+ (10% of X)) + Rs 10100 = X + 0.1X + 5% of (X + 0.1X) + 10100 = X + 0.1X+.05(1.1x) + RS1090=1.1X +.055X90=1.155XX=90/1.155=77.92

Now excise amount will be = 10% on 77.92=7.79VAT will be5% on (77.92+7.79) = 4.29

Now the invoice will be as followsBasic price = 77.92Excise = 7.79VAT= 4.29Charges = 10.00Total = 100.00

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For product B

Basic Price = 200Excise = 20 (10% on Rs 200)VAT = 11(5% on RS 200+Rs 20)Total = 231.00

Invoice raised to customer XYZ will be as follows:

Particulars Amount(Rs)Basic Price 277.92(200+77.92)Excise 27.79(20+7.79)VAT 15.29(4.29+11.00)Charges 10.00Total 331.00

Case 5

Take another example of products A and B, which have been sold to Customer XYZ.Product A’s selling price is inclusive of tax and product B is without price inclusive of taxand it is coming under MRP provision of Excise Act.

Details of selling price and defined structure for price inclusive of tax are given below:

Selling price of A = Rs 100 (including taxes)Selling price of B = Rs 200 (excluding taxes)MRP is 500 and abatement % is 20%

Structure 1 = Price inclusive tax structure for product A-includes (Excise, VAT, chargesRs 10)Structure 2 = for product B includes (Excise, VAT)Excise rate is 10 % and VAT rate is 5 %

Now the program will consider the structure defined on the line for price inclusive tax,means Structure 1 for product A and Structure 2 for product B.

Excise and VAT calculated for the product are as follows:

For product A

Lets price will be” X” on which excise duty will be calculated.Rs 100 = X+ (10% of X) + 5% of (X+ (10% of X)) + Rs 10100 = X + 0.1X + 5% of (X + 0.1X) + 10100 = X+0.1X +.05(1.1X) +RS1090 = 1.1X + .055X90 = 1.155XX = 90/1.155=77.92

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Now excise amount will be = 10% on 77.92=7.79VAT will be 5% on (77.92+7.79) = 4.29

Now the invoice will be as follows:

Basic price = 77.92Excise = 7.79VAT = 4.29Charges = 10.00Total = 100.00

For product B:

Basic Price = 200Excise = 40 (Rs 500-(20%of 500)*10/100)VAT = 12(5% on RS 200+Rs 40)Total = 252.00

Invoice raised to customer XYZ will be as follows:

Particulars Amount(Rs)Basic Price 277.92(200+77.92)Excise 47.79(40+7.79)VAT 16.29(4.29+12.00)Charges 10.00Total 352.00

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Microsoft® Business Solutions–Navision® 4.0 – Auto Debit to Excise

Registers

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Table of Contents

Overview ............................................................................................................................ 3

Detailed Setup .............................................................................................................. 3

Comprehensive Functionality ..................................................................................... 3

Reports ........................................................................................................................... 3

Setup for Auto Debit to Excise Register Functionality ................................................ 4

Excise Setup: ................................................................................................................ 4

E.C.C. Nos. ................................................................................................................... 4

Excise No. Series: ........................................................................................................ 5

Claim Setoff: .................................................................................................................. 6

Structure: ....................................................................................................................... 6

Transactions ...................................................................................................................... 8

Sales Order (in case of RG 23 A) .............................................................................. 8


Sales Order (in case of RG 23 C)............................................................................ 17


Sales Order (in case of PLA) .................................................................................... 26


Sales Order (in case of Service Tax as Excise Credit) ........................................ 35


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Overview

The Auto Debit to Excise Register functionality enables you to eliminate the Exciseliability of a particular sales order or invoice document while posting the document. On

transaction level the program will allow you to go to excise claim setoff form to eliminatethe liability. You can eliminate the Excise payables with PLA, RG 23 A Part II, RG 23 CPart II and also with Service Tax as Excise Credit.

Detailed Setup

You should prepare the following setups to enable the Auto Debit to Excise Register functionality.


other excise setup.Structure Define structure to calculate the excise amount.

Claim Setoff Setup eligibility criteria between excise componentsto claim the excise credit.


Following are the comprehensive functionalities covered under Auto Debit to Exciseregister:

• Settlement of excise liability with Personal ledger Account (PLA) through SalesOrder/Invoice in case of type Item, Fixed Asset, G/L Account and Charge (Item).

• Settlement of excise liability with RG 23 A Part II through Sales Order/Invoice incase of type Item, Fixed Asset, G/L Account and Charge (Item).

• Settlement of excise liability with RG 23 C Part II through Sales Order/Invoice incase of type Item, Fixed Asset, G/L Account and Charge (Item).

• Settlement of excise liability with Service tax as Excise Credit through SalesOrder/Invoice in case of type Item, Fixed Asset, G/L Account and Charge (Item).

Reports

Provision to generate posted Sales Invoices with PLA entry no., RG 23 A part II entryno., RG 23 C part II entry no.

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Setup for Auto Debit to Excise Register Functionality

Excise Setup:


In combination of Excise Business Posting Group and Excise Product Posting Groupenter the percentages and formula for calculation of excise amount and provide the G/L

Account code to affect the financial part.

E.C.C. Nos.


You create the ECC number. Where more than one location is present you could definelocation-wise ECC number, otherwise one ECC number could be defined and mappedwith company, in Company Information setup.

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Excise No. Series:

Navigation:Financial Management → Setup → Excise → Excise No. Series

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Field DescriptionType Select the RG register type from the dropdown list.

E.C.C. No. Select the relevant ECC number from the list.

Description Provide a description for reference

No. Series Select the No. Series that you have created.

Claim Setoff:

Navigation:Financial Management → Setup → Excise → Claim Setoff

In the above Claim Setoff window you should define the edibility criteria between exciseduty components to eliminate the liability against the available excise credit as par excise duty components .

The column heading is denoting the excise credit components and rows are denotingexcise liability components. The available credit of a particular duty component could beused when the excise duty component are defined in the rows under a particular columnheading.

Structure:

Navigation:

Financial Management → Setup → Structure → Structure

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Define a structure that denoting excise.

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Transactions

The Auto Debit to Excise Register functionality is available in sales order and invoice.

Follow the steps and procedure to execute the Auto Debit to Excise Register in salesorder as per the examples given below.

Sales Order (in case of RG 23 A) Setoff excise liability with credit available in RG 23 A part II through sales order.



Sell-to Customer No. Choose a customer from the list. Location Code Select Yellow location, where ECC No. is mapped

in location card. Structure Select a structure denoting Excise

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Type Item No. 1000 Direct Debit to PLA / RG Yes Quantity 2 Unit Price Excl. VAT 5000 Line Amount Excl. VAT 10000


Then click Function → Direct Debit To PLA / RG.

Program will open Excise Cenvat Claim form as below:

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The Excise Cenvat Claim form is displaying the available excise credit amount. It is alsodisplaying the excise liability stands for the particular sales order.

Click Detail to utilize the available credit amount against the liability.

Program will open Excise Cenvat Claim Detail form as below. In this form you enter theamount in RG 23 A tab. Each of the tabs here in this window is representing the register of excise.

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Enter the amount in RG 23 A Part II tab corresponding to the excise duty liabilitycomponent as par the example given below.

RG 23 A BED Amount 1000 RG 23 A AED(TTA) Amount 20 RG 23 A AED(GSI) Amount 20 RG 23 A ADET Amount 20 RG 23 A ADE Amount 20 RG 23 A NCCD Amount 20 RG 23 A SAED Amount 20 RG 23 A SED Amount 20 RG 23 A eCESS Amount 20 RG 23 A SHE CESS Amount 20

The available credit of RG 23 A Part II is completely utilized. The moment you haveentered amount the Remaining Liability get reduced to zero.

Click Escape to come out from Excise Cenvat Claim Detail window. The Excise CenvatClaim for will now display as below.

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Click escape to come out of Excise Cenvat Claim form.

Post the Sales Order.


The posted information of sales order will display the entries which has updated theexcise register.


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The above window is displaying that the sales order has updated the excise register.

Select RG 23 A Part II and click Show.

System will debit the excise duty components which were used in CENVAT claim form.

Select G/L Entry and click Show.

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The above window has affected the G/L Accounts:

Description Dr/Cr AmountCustomers Domestic Account Dr 11,180.00Excise Payable Account Cr 1,180.00Sales, Retail – Dom. Account Cr 10,000.00Excise payable Account Dr 1,180.00CENVAT Cr. Receivable Account Cr 1,180.00

First System will credit Excise payable account and then transfer the excise payable

amount to CENVAT Cr. Receivable account by debiting Excise payable and creditingCENVAT Cr. Receivable A/C as we have setoff the excise payable with RG 23 A part IIregister.

Note:

1. System will allow you to eliminate the liability using Auto Debit to Excise Register functionality for excisable goods and excisable capital goods, also for G/L

Account, Fixed Assets and Charge (Item).

2. You can eliminate the liability amount from any of the excise registers or also can

use all register according to the availability of credit amount at a time irrespectiveexcise register.

3. Program will validate eligibility criteria you have defined in the Claim Setoff formwhile utilizing the available excise credit amount.

4. In case of non excisable item program will not open the Excise Cenvat Claimform.

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5. If you make a partial shipment in the sales order line the program will calculateand populate the partial liability amount in Excise Cenvat Claim form onexecuting Auto Debit to Excise Register.

6. You can also post the same transaction from Sales Invoice.

7. At the same time you can utilize the credit of PLA, RG 23 C part II and service asexcise credit.

Generation of posted sales invoice with RG 23 A part II entry no. through posted salesinvoice by clicking Print menu button and select print invoice.

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In the invoice system will update the RG 23 A part II entry no.

Sales Order (in case of RG 23 C)

Setoff excise liability with credit available in RG 23 C part II through sales order.






Type Item No. 70076 Direct Debit To PLA / RG Yes Quantity 1

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Unit Price Excl. VAT 10000 Line Amount Excl. VAT 10000




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Program will open Excise Cenvat Claim Detail form as below. In this form you enter theamount in RG 23 C tab. Each of the tabs here in this window is representing the register of excise.

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Enter the amount in RG 23 C Part II tab corresponding to the excise duty liabilitycomponent as par the example given below.

RG 23 C BED Amount 1000 RG 23 C AED(TTA) Amount 20 RG 23 C AED(GSI) Amount 20 RG 23 C ADET Amount 20 RG 23 C ADE Amount 20 RG 23 C NCCD Amount 20 RG 23 C SAED Amount 20 RG 23 C SED Amount 20 RG 23 C eCESS Amount 20 RG 23 C SHE CESS Amount 20

The available credit of RG 23 C Part II is completely utilized. The moment you haveentered amount the Remaining Liability get reduced to zero.

Click Escape to come out from Excise Cenvat Claim Detail window. The Excise CenvatClaim for will display as below.

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Click escape to come out of Excise Cenvat Claim form.





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Select RG 23 C Part II and click Show.



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Description Dr/Cr AmountCustomers Domestic Account Dr 11,180.00Excise Payable Account Cr 1,180.00Sales, Retail – Dom. Account Cr 10,000.00Excise payable Account Dr 1,180.00CENVAT Cr. Receivable Account Cr 1,180.00

First System will credit Excise payable account and then transfer the excise payableamount to CENVAT Cr. Receivable account by debiting Excise payable and creditingCENVAT Cr. Receivable A/C as we have setoff the excise payable with RG 23 C part IIregister.

Note:

1. System will allow you to eliminate the liability using Auto Debit to Excise Register functionality for excisable goods and excisable capital goods, also for G/L


2. You can eliminate the liability amount from any of the excise registers or also canuse all register according to the availability of credit amount at a time irrespectiveexcise register.

3. Program will validate eligibility criteria you have defined in the Claim Setoff formwhile utilizing the available excise credit amount.

4. In case of non excisable item program will not open the Excise Cenvat Claimform.

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5. If you make a partial shipment in the sales order line the program will calculateand populate the partial liability amount in Excise Cenvat Claim form onexecuting Auto Debit to Excise Register.


7. At the same time you can utilize the credit of PLA, RG 23 A part II and service asexcise credit.


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Sales Order (in case of PLA)

Setoff excise liability with credit available in PLA through sales order.

Navigation:

Sales & Marketing → Order Processing → Order





Type Item No. 1000 Direct Debit To PLA / RG Yes Quantity 2 Unit Price Excl. VAT 5000 Line Amount Excl. VAT 10000


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The Excise Cenvat Claim form is displaying the available excise credit amount in PLA. Itis also displaying the excise liability stands for the particular sales order.


Program will open Excise Cenvat Claim Detail form as below. In this form you enter theamount in PLA tab. Each of the tabs here in this window is representing the register of excise.

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Enter the amount in RG 23 C Part II tab corresponding to the excise duty liabilitycomponent as par the example given below.

PLA BED Amount 1000 PLA AED(TTA) Amount 20 PLA AED(GSI) Amount 20 PLA ADET Amount 20 PLA ADE Amount 20 PLA NCCD Amount 20 PLA SAED Amount 20 PLA SED Amount 20 PLA eCESS Amount 20 PLA SHE CESS Amount 20

The available credit of PLA is partially utilized. The moment you have entered amountthe Remaining Liability get reduced to zero.

Click Escape to come out from Excise Cenvat Claim Detail window. The Excise CenavtClaim form will display as below.

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Again click escape to come out of Excise Cenvat Claim form.





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Select PLA Entry and click Show.



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Description Dr/Cr AmountCustomers Domestic Account Dr 11,180.00Excise Payable Account Cr 1,180.00Sales, Retail – Dom. Account Cr 10,000.00Excise payable Account Dr 1,180.00PLA Account Cr 1,180.00

First System will credit Excise payable account and then transfer the excise payableamount to CENVAT Cr. Receivable account by debiting Excise payable and creditingPLA A/C as we have setoff the excise payable with PLA register.

Note:

1 System will allow you to eliminate the liability using Auto Debit to Excise Register functionality for excisable goods and excisable capital goods, also for G/L


2 You can eliminate the liability amount from any of the excise registers or also canuse all register according to the availability of credit amount at a time irrespectiveexcise register.

3 Program will validate eligibility criteria you have defined in the Claim Setoff formwhile utilizing the available excise credit amount.

4 In case of non excisable item program will not open the Excise Cenvat Claimform.

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5 If you make a partial shipment in the sales order line the program will calculateand populate the partial liability amount in Excise Cenvat Claim form onexecuting Auto Debit to Excise Register.

6 You can also post the same transaction from Sales Invoice.

7 At the same time you can utilize the credit of RG 23 A part II, RG 23 C part II andservice as excise credit.


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Sales Order (in case of Service Tax as Excise Credit)

Service Tax as Excise Credit

Execute the service tax as Excise credit batch job to utilize the service tax credit in

elimination of excise liability. The Auto Debit to Excise Register functionality will alsowork in this scenario.

Navigation:Financial Management → General Ledger → Periodical Activity → Service Tax→ Service as Excise Credit

The service tax credit amount of marked record will available now in Excise CenvatClaim form, which could be utilized against elimination of the excise liability.


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Type Item No. 1000 Direct Debit To PLA / RG Yes Quantity 1 Unit Price Excl. VAT 5000 Line Amount Excl. VAT 5000



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The Excise Cenvat Claim form is displaying the available excise credit amount asService as Excise Credit. It is also displaying the excise liability stands for the particular sales order.

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Enter the amount in Service Tax column and corresponding to the excise duty liabilitycomponent as par the example given below.

PLA BED Amount 500 PLA AED(TTA) Amount 10 PLA AED(GSI) Amount 10 PLA ADET Amount 10 PLA ADE Amount 10 PLA NCCD Amount 10 PLA SAED Amount 10 PLA SED Amount 10 PLA eCESS Amount 10 PLA SHE CESS Amount 10

The available service as excise credit is partially utilized.

Click Escape to come out from Excise Cenvat Claim window.

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Description Dr/Cr AmountCustomers Domestic Account Dr 5,590.00Excise Payable Account Cr 590.00Sales, Retail – Dom. Account Cr 5,000.00Excise payable Account Dr 590.00Service Tax Recoverable Account Cr 590.00

First System will credit Excise payable account and then transfer the excise payableamount to CENVAT Cr. Receivable account by debiting Excise payable and creditingService Tax Recoverable A/C as we have setoff the excise payable with Service Tax asExcise Credit.

Note:

1 To utilize the Service Tax as Excise Credit you should execute the Service Taxas Excise batch job in periodical activity.

2 System will allow you to eliminate the liability using Auto Debit to Excise Register functionality for excisable goods and excisable capital goods, also for G/L


3 You can eliminate the liability amount from any of the excise registers or also canuse all register according to the availability of credit amount at a time irrespective

excise register.4 Program will validate eligibility criteria you have defined in the Claim Setoff form

while utilizing the available excise credit amount.

5 In case of non excisable item program will not open the Excise Cenvat Claimform.

6 If you make a partial shipment in the sales order line the program will calculateand populate the partial liability amount in Excise Cenvat Claim form onexecuting Auto Debit to Excise Register.

7 You can also post the same transaction from Sales Invoice.

8 At the same time you can utilize the credit of PLA, RG 23 A part II and RG 23 Cpart II.

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AppendixThe XYZ Limited Company is trader of excisable materials. XYZ Limited keeps updatingthe excise register on regular basis and on a given moment decided to eliminate theliability from the sales transaction level. According to the excise register XYZ limited hasgot the following available excise credit.

Excise Duty Component RG 23 A RG 23 C PLABED Amount 12000 10000 15000

AED(TTA) Amount 5000 3000 7000 AED(GSI) Amount 5000 3000 7000 ADET Amount 5000 3000 7000 ADE Amount 5000 3000 7000 CESS Amount 5000 3000 7000 NCCD Amount 5000 3000 7000 SAED Amount 5000 3000 7000 SED Amount 5000 3000 7000 eCESS Amount 5000 3000 7000 SHE CESS Amount 5000 3000 7000

Xyz Limited is preparing an invoice to sale the excisable commodity to its client. Theexcise duty component is calculated for the sales invoice is as below.

RG 23 A BED Amount 10000 RG 23 A AED(TTA) Amount 200 RG 23 A AED(GSI) Amount 200 RG 23 A ADET Amount 200 RG 23 A ADE Amount 200 RG 23 A NCCD Amount 200 RG 23 A SAED Amount 200 RG 23 A SED Amount 200 RG 23 A eCESS Amount 200 RG 23 A SHE CESS Amount 200

XYZ Limited is decided to eliminate the excise liability, calculated on the invoice, directly

from the sales invoice level. Using the Auto Debit to Excise Register functionality XYZhas utilized the available credit to eliminate the liability.

XYZ has utilized the available credit of RG 23 A. The excise register will be updatedautomatically on posting the sales invoice. XYZ if again decide to use Auto Debit toExcise Register functionality the excise register will display the following (consideringthere is no input purchase occurred in between).

Excise Duty Component RG 23 A RG 23 C PLA

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BED Amount 2000 10000 15000 AED(TTA) Amount 4800 3000 7000 AED(GSI) Amount 4800 3000 7000 ADET Amount 4800 3000 7000 ADE Amount 4800 3000 7000 CESS Amount 4800 3000 7000 NCCD Amount 4800 3000 7000 SAED Amount 4800 3000 7000 SED Amount 4800 3000 7000 eCESS Amount 4800 3000 7000 SHE CESS Amount 4800 3000 7000

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Microsoft ® Business Solutions–Navision ® 4.0- Excise Registers Serial

Numbers

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Setup for Excise Registers Serial Numbers Functionality .....................................3 No. Series: ........................................................................................................3 E.C.C. Nos. .......................................................................................................4 Excise No. Series..............................................................................................5

Purchase Transactions .........................................................................................6 Purchase Order for RG 23A Part I & Part II entry..............................................6

Viewing the Posted Transaction ....................................................................7 Purchase Order for RG 23C Part I & Part II entry............................................10

Viewing the Posted Transaction ..................................................................11 Purchase Order for RG 23D entry ...................................................................14


Sales Transactions .............................................................................................17 Sales Order .....................................................................................................17

Viewing the Posted Transaction ..................................................................18 When to Use Excise Register Series Number? ..................................................21

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Overview

Transactions of excisable goods are recorded in the RG 23A Part I, RG 23A Part II, RG23C Part I, RG 23C Part II, and RG 23D registers. The program keeps track of all inward

and outward transactions using the user defined number series for the specific RGregister. A number series either can be mapped against multiple locations or theseparate number series can be mapped for separate location ECC number, based onthe business need.

Detailed Setup

You use the following setups to enable the Excise Registers Serial Numbers functionalityin the program.


No. Series Define the number series to be used in the ExciseNo. Series window.

E.C.C. Nos. Define the ECC number to be used in the ExciseNo. Series window.

Excise No. Series Define the series for each location ECC number.


The Excise Registers Serial Numbers functionality enables you to store the purchase or sales transaction with the defined number series in the RG 23A, RG 23C, and RG 23Dtables.

Setup for Excise Registers Serial Numbers Functionality

No. Series:

Navigation:Financial Management → Setup → No. Series

Create the No Series which are used in the RG registers. You can define the number series based on the type of register.

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Field Description

Code Define a code for the number series.

Description Define a description for reference.

Starting No. Enter the starting number for the number series. Thisnumber can be alphanumeric.

Ending Date Enter the end number. The number series will beexpired the moment it reaches to the end number.

Last Date Used The program will update this field.

Last No. Used The program will update this field.

Default Nos. Place a check mark in this field so that the program canuse the number series as default one.

Manual Nos. Place a check mark in this field so that the program canuse manual numbers in the defined series.

Date Order Place a check mark in this field so that the program canuse number series according to the date.

E.C.C. Nos.


Create the ECC number here. If more than one location is available then you can defineECC number based on location, otherwise you can define one ECC number and canmap it with company, in the Company Information setup.

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Excise No. Series

Navigation:Financial Management → Setup → Excise → Excise No. Series


Field DescriptionType Choose the RG register type from the dropdown list.

E.C.C. No. Choose the relevant ECC number from the list.

Description Define a description for the reference.

No. Series Choose the number series that you have created.

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The purchase receipt or invoice transaction will be recorded in RG 23A Part I, RG 23APart II, RG 23C Part I, RG 23C Part II, and RG 23D registers according to the nature of the product. In the following transaction the purchase receipt and invoice entry are

discussed, where the excise registers are updated with user defined number series.

Purchase Order for RG 23A Part I & Part II entry



Buy-from Vendor No. Choose a vendor from the list. Structure Choose the structure as Excise Location Code Choose the location as Blue on the Shipping tab

(Location code must be attached with the relevant ECC No. in the Location Card)

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Type Item No. 1000 Quantity 10 Direct Unit Cost Excl. VAT 1000


Post the purchase order as Receive and Invoice.


The posted information of purchase receipt will display the excise register entries.

Navigation:Purchases → History → Posted Receipt

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In the above window you can see that there are two excise entries one is for RG 23APart I and the other one is for RG 23A Part II.

Select the RG 23A Part I line in the Navigate form and then click Show to view theexcise register number series. The RG Entry No. field shows the excise register number series that you have defined in the Excise No. Series setup.

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Again select the RG 23A Part II line in the Navigate form and then click Show to view theexcise register number series. The RG Entry No. field shows the excise register number series that you have defined in the Excise No. Series setup.

Note:

1. Serial number is used in Purchase Order / Invoice, in case the Type field isselected either as Item or as Fixed Assets on the purchase order line.

2. Serial number is used in Purchase Order / Invoice, where the item or fixed assetis defined as excisable material.

3. Serial number is used in Purchase Order / Invoice, in case the Supplementaryfield has a check mark on the purchase order line and the Type is selected asCharge (Item).

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Purchase Order for RG 23C Part I & Part II entry



Buy-from Vendor No. Choose a vendor from the list. Structure Choose the structure as Excise Location Code Choose the location as Blue on the Shipping tab



Type Item No. 70076 (which is a capital item) Quantity 10 Direct Unit Cost Excl. VAT 10020



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The posted information of purchase receipt will display the excise register entries.

Navigation:

Purchases → History → Posted Receipt

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In the above window you see that there are two excise entries one is for RG 23C Part Iand the other one is for RG 23C Part II.

Select the RG 23CPart I line in the Navigate form and then click Show to view the exciseregister number series. The RG Entry No. field shows the excise register number seriesthat you have defined in the Excise No. Series setup.

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The posted information of purchase invoice will display the excise register entries.


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Select the RG 23 D line in the Navigate form and then click Show to view the exciseregister number series. The RG Entry No. field shows the excise register number seriesthat you have defined in the Excise No. Series setup.

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Note:

1. For RG 23 D you should place a check mark in the Trading field in Location andshould also place a check mark in the Trading field in Order / Invoice.

2. Serial number is used in Purchase Order / Invoice, in case the Type field isselected either as Item or as Fixed Assets on the purchase order line.

3. Serial number is used in Purchase Order / Invoice, where the item or fixed assetis defined as excisable material.

4. Serial number is used in Purchase Order / Invoice, in case the Supplementaryfield has a check mark on the purchase order line and the Type field is selectedas Charge (Item).

Sales Transactions

The sales shipment transaction of input item will be recorded in the RG 23A Part I. In thefollowing transaction the sales shipment entry is discussed, where the excise register isupdated with user defined number series.

Sales Order


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Sell-to Customer No. Choose a customer from the list. Structure Choose a structure denoting Excise Location Code Choose the location as Blue on the Shipping tab



Type Item No. 1000 Quantity 10 Unit Price Excl. VAT 4000


Post the sales order as Ship and Invoice.


The posted information of sales shipment will display the excise register entries.

Navigation:Sales & Marketing → History → Posted Shipment

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Select the RG 23A Part I line in the Navigate form and then click Show to view theexcise register number series. The RG Entry No. field shows the excise register number series that you have defined in the Excise No. Series setup.

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When to Use Excise Register Series Number?

1. Excise Register Series Number functionality will be used in the following documentswith different conditions as described below.

Document Type Condition• When the Type field is selected either as Item or

as Fixed Assets on the purchase order line.Purchase Order / Invoice

• When the Supplementary field has a check markon the purchase order line and the Type field isselected as Charge (Item).

• When the Type is selected either as Item or asFixed Assets on the sales order line

• When Claim Deferred Excise field has a checkmark on the sales order line for Item and Fixed

Assets

Sales Order / Invoice

• When the Direct Debit To PLA / RG field has acheck mark on the sales order / invoice line for Item, Fixed Asset, G/L Account, and Charge(Item)

Purchase Credit Memo /Return Order

• When the Type field is selected either as Item or as Fixed Assets on the purchase credit memo or return order line

Sales Credit Memo / ReturnOrder

• When the Type field is selected either as Item or as Fixed Assets on the purchase order line

Transfer Order Shipment/ Receipt

• When shipment or receipt has been made for excisable goods

Item Reclass. Journal • When excisable goods are transferred from thetrading location to manufacturing location

Item Journal • When any kind of adjustment entry has beenmade for excisable goods

Consumption Journal • When consumption has been recorded for excisable goods

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2. Excise Register Series Number functionality will be used in the following batch job /

functionality

Batch Job/ Functionality DescriptionClaim Deferred Excise The Claim Deferred Excise batch job enables you to

utilize the deferred excise credit amount. The amountwill be credited and the entry will be appeared in RG 23C register, where the number series will be activated.

General Journal The Excise Payment functionality creates an entry inExcise Register from the General Journal. The PLA, RG23 A Part II, and RG 23 C Part II registers will beupdated according to the use of excise credit amount.

Payment of Service Tax At the time of discharging service tax if you use exciseas service credit amount, then the program will createentries in Excise registers and the number series will begenerated.

Undo Receipt If you use the Undo Receipt functionality in case of excisable item, then the program will create entry inExcise registers, where the number series will begenerated.

Undo Shipment If you use the Undo Shipment functionality in case of excisable item, then the program will create entry inExcise registers, where the number series will begenerated.

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Microsoft ® Business Solutions–Navision ® 4.0- Input Service Distributors

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Setups Required ...................................................................................................4 Service Tax Setup.............................................................................................5 Tax Groups .......................................................................................................6 Tax Setup..........................................................................................................6 Tax Registration Nos.........................................................................................7 General Ledger Setup.......................................................................................8 Locations...........................................................................................................9 Company Information........................................................................................9 Calculation of Service Tax in case of Input Service Distributor through thePurchase Order/Invoice...................................................................................11


Calculation of Service tax in case of Input Service Distributor through PurchaseReturn Order/Credit Memo..............................................................................21

Viewing the Posted Transaction ..................................................................23 Calculation of Service Tax through Journals.......................................................31

Calculation of Service Tax in case of Input Service Distributor through theGeneral Journal...............................................................................................31

Viewing the Posted Transaction ..................................................................33 In case of Service Tax on Advance Payment to Vendor .................................41

Viewing the Posted Transaction ..................................................................43 Viewing the Posted Transaction ..................................................................47

Calculation of Service Tax on G/L to G/L/Bank in case of Input Service

Distributor ........................................................................................................51 Viewing the Posted Transaction ..................................................................52

Updating Opening Balance of Service Tax in case of Input Service Distributor ........................................................................................................................57

Viewing the Posted Transaction ..................................................................59 Adjustment of Service Tax in case if Input Service Distributor ........................65

Viewing the Posted Transaction ..................................................................67 Adjust Service Tax Credit ...................................................................................70

Adjustment in case of Input Service Distributor Entries...................................71 Adjustment in case of Normal Service Tax Entries..........................................72

Service Tax Distribution ......................................................................................74

Distribution of Input Service Tax to Three Different Locations ........................78 Viewing the Posted Transaction ..................................................................81

Distribution of Service Tax Amount to Taxable and Non Taxable Locations .103 Viewing the Posted Transaction ................................................................105

Reports .............................................................................................................115 Input Service Distribution Register ................................................................115 Service Tax Distribution Invoice/Challan .......................................................116

Appendix...........................................................................................................118

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Overview of FunctionalityInput Service Distributor functionality enables you to distribute the input service tax creditto different units/branches.

CENVAT Credit Rules 2004 provide the facility to distribute the service tax credit oninput services to the branches/ head office, which can be utilized in the payment of excise/ service tax.

Several manufacturing or service providing units, scattered geographically, work under ahead office. The head office either incurs common expenses or procures services(inputs) centrally. Head office even clears all bills for supplies or services centrally.There is facility provided by law to distribute the service tax credit to other units.

This feature will facilitate in transferring the service tax credit to other units by issuing therequired invoice / bill / challan.

Detailed Setup

Following Setup is required to enable the Input Service Distributor functionality.

Setup Area DescriptionService Tax Setup Define the Service Tax Setup, Group Code, and

Registration Number.

Location Place a check mark in the Input Service Distributor field in the Location card.

Company Information Place a check mark in the Input Service Distributor field in the Company Information master.

General Ledger Setup Assign number series for service tax distribution andposted service tax distribution.


Following comprehensive functionalities are covered under Input Service Distributor:

• Provision to calculate service tax in purchase transactions for Input ServiceDistribution.

• Provision to calculate service tax in case advance payment is made to vendor for Input Service Distribution.

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• Provision to calculate service tax in case of General Ledger for Input ServiceDistribution.

• Provision to enter the opening balances of service tax in case of Input ServiceDistributor.

• Provision to make positive and negative adjustments in the service tax entriesrelated to Input Service Distribution.

• Provision to adjust the service tax credit.

• Provision to distribute the input service tax credit to various units / branches /head office.

• Provision to load the amount of input service tax credit to services account.

• Provision to generate service tax distribution invoice / challan

• Provision to generate Input Service Distribution register.

Reports

Provision to generate Input Service Distribution Register and Service Tax DistributionInvoice/Challan.

Setups Required

Followings are the setups required to be entered for Input Service Distributor.

• Service Tax• General Ledger Setup• Locations• Company Information

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Service Tax Setup

Navigation:Financial Management → General Ledger → Setup → Service Tax

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Tax Groups

Navigation:Financial Management → General Ledger → Setup → Service Tax → TaxGroups

Define the code of service tax groups with description and minor head.

Tax Setup

Navigation:Financial Management → General Ledger → Setup → Service Tax → Tax Setup

In Service Tax Setup, select the account numbers for Service Tax Receivable Interim(Distribution) A/C and Service Tax receivable (Distribution) A/C.

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General Ledger Setup

Navigation:Financial Management → General Ledger → Setup → General Ledger Setup

On the Numbering tab, choose the number series for service tax distribution and postedservice tax distribution.

Fields Description

Fields DescriptionService Tax Distribution Nos. Choose the number series from the lookup

list for service tax distribution numbers.

When the user press F3 in the Service taxDistribution form, then the program willgenerate the number from this setup.

S.T. Posted Distribution Nos. Choose the number series from the lookuplist for posted service tax distributionnumbers.

When the user post the Service taxDistribution form, then the program willpost the document with the number seriesassigned with this field.

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Locations


Fields Description

Fields DescriptionInput Service Distributor Place a check in this field so that theprogram can identify a particular locationas Input Service Distributor.

When user post the purchase transactionwith location code and that location is InputService Distributor field “True”, then theprogram will update the Input ServiceDistributor field in Service Tax Entry andService Tax Entry Detail.

Company Information

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Fields Description

Fields DescriptionInput Service Distributor Place a check mark in this field so that the

program can identify the company as InputService Distributor.

If a check mark is placed in the InputService Distributor field in the CompanyInformation then the program willautomatically place a check mark in InputService Distributor field in the PurchaseOrder/Invoice and Purchase ReturnOrder/Credit Memo Tax Information tab.

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Calculation of Service Tax through PurchaseTransactions

Calculation of Service Tax in case of Input Service Distributor through the Purchase Order/Invoice


Fields Description:

Tax Information tab:

Fields DescriptionInput Service Distribution By default this field will get a check mark

incase you have inserted a check mark inInput Service Distributor field in CompanyInformation or in location card.


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To calculate Service Tax, fill the fields in the Purchase Order form as follows:

On the Header:

Buy from Vendor No : 10000 Structure: Service Location Code : Blue (Place a check mark in the Input Service Distributor

field in the Location Card).

On the Line:

Type : G/L Account No. : 8410 Description : Advertisement Quantity: 10 Direct Unit Cost: 1000 Line Amount: 10000

Calculate Structure

Press F9 to view the service tax amount

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By default the Input Service Distributor field on the Tax Information tab gets a checkmark in case the Input Service Distributor field in the Company Information window hasbeen checked.




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G/L Entry


Particulars Type Amount(Rs) Advertisement A/C DR 10000Service TaxReceivable Interim(Distribution) A/C

DR 1236

Vendor CR 11236


The program will calculate the Service Tax based on the following information:

Base: 10000 Service Tax %: 12% Ecess %: 2% SHE CESS %: 1%

Calculation:

10000*12%: 1200 (Service tax)1200*2%: 24 (ECESS)1200*1%: 12 (SHE CESS)

Total Service Tax Amount including ECESS and SHE CESS (1200+24+12) = 1236.

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Service Tax Entry

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Application of Invoice at the time of making payment to vendor through CashPayment Voucher. (You can also use General Journal)

Select the vendor and apply the invoice number against which you have to make thepayment.

Post the Cash Payment Voucher.

Navigate the posted transaction.

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G/L Entry


Particulars Type Amount(Rs)Vendor A/C DR 11236Cash A/C CR 11236Service TaxReceivable(Distribution) A/C

DR 1236

Service Tax

ReceivableInterim(Distribution) A/C

CR 1236

The program will transfer service tax amount from the Service Tax Receivable Interim(Distribution) account to the Service Tax Receivable (Distribution) account.

Also the program will create Service tax Entry Detail in original document (postedpurchase invoice). In service tax entry the program will update Amount Received/Paidfield.

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In Service Entry Detail form, the program will update the Location code “Blue” and inputService Distributor field with value as YES.

Note:1. Same transaction can be done through Purchase Invoice.2. If Input Service Distribution field in the Purchase Order/Invoice header has been

checked and the Input Service Distributor field in the Location card has not beenchecked, and you are using location code, then the program will give the error message while posting Purchase Order/Invoice.

3. If Input Service Distribution field in the Purchase Order/Invoice header has notbeen checked and the Input Service Distributor field in the Location card has

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been checked and you are using location code, then the program will give theerror message while posting Purchase Order/Invoice.

4. Service tax entries with a check mark in the Input Service Distribution field willnot be available for credit while making payment of service tax and excise.

5. Service tax entries with a check mark in the Input Service Distribution field will beavailable for distribution.

6. Service tax entries related to Input Service Distributor will not be available for service tax as excise credit and for service tax payment in the same location. If you want to take the credit of the entry then you should transfer the entry to other location which is not input service distributor location through the Service taxDistribution form.

Calculation of Service tax in case of Input Service Distributor through Purchase Return Order/Credit Memo

Navigation:

Purchases → Order Processing → Credit Memo.

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Tax Information tab

Fields Description:

Fields Description

Input Service DistributionThis field will be by default true if you haveinserted a check mark in CompanyInformation or in location card.


To calculate Service Tax, fill the fields in the Purchase Credit Memo form asfollows:

On the Header:Buy from Vendor No : 10000 Structure: Service Location Code : Blue (Place a check mark in the Input Service Distributor

field in the Location Card). On the Line:

Type : G/L Account No. : 8410 Description : Advertisement

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Quantity: 10 Direct Unit Cost: 1000 Line Amount: 10000

Calculate Structure


By default the Input Service Distributor field on the Tax Information tab will be checked if the Input Service Distributor field in the Company Information window is checked.

Post the Credit memo.


Navigation:Purchases → History → Posted Credit Memo

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G/L Entry


Particulars Type Amount(Rs) Advertisement A/C

CR 10000

Service TaxReceivableInterim(Distribution) A/C

CR 1236

Vendor DR 11236



Base: 10000 Service tax %: 12% Ecess %: 2% SHE CESS %: 1%

Calculation:



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In the Service Tax Entry window, the program will update Location Code “Blue” andupdate Input Service Distribution field with YES.

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Application of Credit memo at the time of receiving refund from vendor throughCash Receipt Voucher (You can also use General Journal)

Select the vendor and apply the credit memo number against which you have to receivethe payment.Post the Cash Receipt Voucher.

Navigate the posted transaction.

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G/L Entry


Particulars Type Amount(Rs)Vendor A/C CR 11236Cash A/C DR 11236Service taxreceivable(Distribution) A/C

CR 1236

Service Tax

Receivable Interim(Distribution) A/C

DR 1236

The program will transfer service tax amount from the Service Tax Receivable Interim(Distribution) account to the Service Tax Receivable (Distribution) account.

Also the program will create service tax entry details in the original document (postedCredit memo). In the Service Tax Entry winodw the program will update the AmountReceived/Paid field.

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In the Service Entry Detail window the program will update the Location Code “Blue” andupdate input service distributor field with YES.

Note:

1. Same transaction can be done through the Purchase Return Order.2. If Input Service Distribution field in the Purchase Return Order/Credit Memo

header has been checked and the Input Service Distributor field in the Locationcard has not been checked, and you are using location code, then the programwill give the error message while posting Purchase Return Order/Credit Memo.

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3. If Input Service Distribution field in the Purchase Return Order/Credit memoheader has not been checked and Input Service Distributor field in the Locationcard has been checked, and you are using location code, then the program willgive the error message while posting Purchase Return Order / Credit Memo.

Calculation of Service Tax through Journals

Calculation of Service Tax in case of Input Service Distributor through the General Journal

In case of Creating Invoice to Vendor.

Navigation: Financial management → General Ledger → General Journals

The user has to assign the Input Service Distributor location to the batch which is in theuse (by the user). The location should have Input service distributor “True”. If theLocation Code field is blank then the program will collect the data from the CompanyInformation.

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To calculate Service Tax, fill the fields in the general journal line as follows:

Document Type : Invoice Account Type: Vendor Account No. : 10000 (vendor code)Service Tax Group Code : Adv

Service tax Registration No.: BJX118910100578 Amount : -10000 Bal. Account Type: G/L Account Bal Account No.: 8410 (Advertisement A/C)

Post the Document.

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G/L Entry

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Particulars Type Amount(Rs) Advertisement A/C DR 10000Service TaxReceivable Interim(Distribution) A/C

DR 1236

Vendor CR 11236



Base: 10000 Service tax %: 12% Ecess %: 2% SHE CESS %: 1%

Calculation:



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Service Tax Entry

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In the Service Tax Entry window, the program will update the Location Code “Blue” andupdate Input Service Distribution field with YES.

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Application of Invoice at the time of making payment to vendor through CashPayment Voucher. (You can also use the General Journal)

Select the vendor and apply the invoice number against which you have to make thepayment.

Post the Cash payment Voucher.

Navigate the posted transaction

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G/L entry


Particulars Type Amount(Rs)Vendor A/C DR 11236Cash A/C CR 11236Service taxreceivable(Distribution) A/C

DR 1236

Service TaxReceivable Interim

(Distribution) A/C

CR 1236

The program will transfer the service tax amount from the Service Tax ReceivableInterim (Distribution) account to the Service Tax receivable (Distribution) account.

Also the program will create the service tax entry details in the original document. In theService Tax Entry window the program will update the Amount Received/Paid field.

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Service Tax Entry Details

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In the Service Entry Detail window the program will update the Location Code “Blue” andupdate the Input Service Distribution field with YES.

Note:

1. Same transaction can be done through the Journal Voucher.2. Service Tax entries with a check mark in the Input Service Distribution field will

not be available for credit while making payment of service tax and excise.3. Service tax entries with a check mark in the Input Service Distribution field will be

available for the distribution.

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4. At the time of application there should be same location code in the batch whichhas been used at the time of making invoice and that location should have inputservice distributor field “true”.

In case of Service Tax on Advance Payment to Vendor

Navigation: Financial Management → Cash Management → Cash Payment Voucher


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To calculate Service Tax, fill the fields in the Cash Voucher lines as follows:

First Line

Document Type : Payment Serv. Tax on Advance Payment : True Account Type: Vendor Account No. : 10000 (vendor code)Service Tax Group Code : Adv Service tax Registration No.: BJX118910100578 Debit Amount : 10000

Second Line

Document Type : Payment Account Type: G/L Account Account No. : 2910 (Cash) Credit Amount : 10000

Post the Document.

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G/L entry

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Particulars Type Amount(Rs)Vendor A/C DR 10000Cash A/C CR 10000

Service Tax Entry

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In the Service Tax Entry window, the program will update Location Code “Blue” andupdate Input Service Distribution field with YES.

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Application of payment at the time of making invoice to vendor through PurchaseOrder/Invoice

Fill the fields in the Purchase Order form as follows:

On the Header:

Buy from Vendor No : 10000 Structure: Service Location Code : Blue (Place a check mark in Input Service Distributor Field

in the Location Card). Applies –to Doc. Type: Payment Applies-to Doc. No: 1023

On the Line:

Type : G/L Account No. : 8410 Description : Advertisement Quantity: 1 Direct Unit Cost: 8899.96 Line Amount: 8899.96

Calculate Structure

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In this case the program will not calculate service tax as it has already been calculatedat the time of making advance payment to vendor.

By default the Input Service Distributor field on the Tax Information tab will be checked, if the Input Service Distributor field in the Company Information window has beenchecked.




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G/L Entry


Particulars Type Amount(Rs) Advertisement A/C DR 8899.96Service taxreceivable(Distribution) A/C

DR 1100.04

Vendor A/C CR 10000

The program will debit the Service Tax Receivable (Distribution) A/C. Also the program will create service tax entry detail in the original document. In theService Tax Entry window the program will update the Amount Received/Paid field.

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In the Service Entry Detail window the program will update Location code “Blue” andupdate input service distributor field with YES.

Note:

1. Same transaction can be done through the Bank Payment Voucher.2. Service tax entries with a check mark in the Input Service Distribution field will



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4. At the time of application there should be same location code in the PurchaseOrder/Invoice which has been used at the time of making payment and thatlocation should have a check mark in the Input Service Distributor field.

Calculation of Service Tax on G/L to G/L/Bank in case of Input Service Distributor

Navigation: Financial Management → Cash Management → Cash Payment Voucher


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To calculate Service Tax, fill the fields in the Cash Voucher lines as follows:

Document Type : Payment Service Tax Type : Purchase Account Type: G/L Account Account No. : 8410 (Advertisement) Service Tax Group Code : Adv Service tax Registration No.: BJX118910100578 TDS/TCS/Service Tax Party Type : Service tax Vendor TDS/TCS/Service Tax Party : 10000 (Vendor code)Amount : 10000 Bal. Account Type : G/L Account Bal. Account No.: 2910 (Cash)

Post the Document.



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G/L Entry


Particulars Type Amount(Rs) Advertisement A/C DR 10000Service taxreceivable(Distribution) A/C

DR 1236

Cash A/C CR 11236

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Service Tax Entry

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In the Service Tax Entry window the program will update the Location Code “Blue” andupdate Input Service Distribution field with YES.

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Service tax Entry Detail

In the Service Entry Details window, the program will update Location code “Blue” andupdate input service distributor field with YES.

Note:

1. Same transaction can be done through the Bank Payment Voucher.2. Service tax entries with a check mark in the Input Service Distribution field will

not be available for credit while making payment of service tax and excise.

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3. Service tax entries with a check mark in the Input Service Distribution field will beavailable for the distribution.

Updating Opening Balance of Service Tax in case of Input Service Distributor

You need to enter the opening balance in case vendor invoice and partial payment havebeen made to the vendor and service tax has been calculated at the time of creating theinvoice.

Initially enter the opening balance of vendor including service tax amount. Also enter thepayments that have been paid to the vendor and apply both entries before entering theopening balances of service tax.

In the Service Tax Opening form, select the type as “Purchase” and select the

transaction from the lookup list.

After clicking the assist button, the Vendor Ledger Entry window opens, in which you canselect the transaction for which you want to update the opening balances of service tax


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G/L entry

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Particulars Type Amount(Rs)Service Tax Receivable Interim(Distribution) A/C

DR 1236

Service Tax Receivable Interim(Distribution) A/C CR 1236

Service Tax Receivable(Distribution) A/C

DR 1100.04

Service Tax Receivable(Distribution) A/C

CR 1100.04

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Service Tax Entry

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In the Service Tax Entry window the program will update the Location Code field “Blue”and update Input Service Distribution field with YES.

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In the Service Entry Detail window, the program will update the Location Code field“Blue” and update input service distributor field with YES.

Note:

1. Same transaction can be done for the document type Credit memo/Refund.2. Service Tax entries with a check mark in the Input Service Distribution field will



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4. At the time of updating opening balance the user should select the input servicedistribution location in the Location Code field of the Service Tax Opening form.

5. The user should select the type as “Purchase” for updating opening balance of service tax in case of input service distributor.

Adjustment of Service Tax in case if Input Service Distributor


Initially there should be some posted purchase invoice with service tax calculation .

The selected transaction has the value for Services % as 10 and eCess % as 1. Nowyou have to make Service % as 12 and eCess % as 2.

Enter the following fields in the Service Tax Adjustment form.

Applied ST Entry No: 17 (Selected from service tax entry)Type: Purchase Posting Date: 09/05/07 Document No.: 108231AExternal Document No. : ADJ004 Party Code: 10000. Service Tax Group Code: Adv.Service Tax Registration No.: HXJ118910111357 Service Tax Base Amount: 10000 Applied Document Type : Invoice

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Applied Document No. : 108231Applied Posting Date : 09/05/07 Applied ST Base Amount : 10000 Applied Service Tax Amount : 1000 Applied eCess Amount : 10 Applied SHE CESS Amount : 10 Applied Service Tax %: 10 Applied Service Tax eCess % : 1Applied Service Tax SHE Cess %: 1New Service Tax % : 12 (New %)New Service Tax eCess % : 2 (New %)Diff Service Tax Amount : 200 Diff Service Tax eCess Amount : 14 Diff Service tax SHE CESS Amount :2 ST. Rec./Pay. Account (Interim) : 5948 Bal. Account Type (Interim) : Vendor Bal. Account No. (Interim) : 10000 Bal. Account Type : G/L Account Bal. Account No. : 2950


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G/L entry

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The program has created the GL entry with difference amount of service tax, eCess andSHE Cess.

Service Tax Entry

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In the Service Tax Entry window the program will update Location Code “Blue” andupdate Input Service Distribution field with YES.

Note 1: The user can also do the adjustment where the user wants to decrease theService Tax %, Cess %, SHE Cess % and the same can be done for Purchase Creditmemo. The program will create the GL entries and service tax entry accordingly.

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Note 2: If the Purchase Invoice has been distributed then no adjustment is allowed.

Note 3 : The user should select service tax entry with the type as “Purchase” for doingadjustments in case of input service distributor.

Adjust Service Tax Credit

Navigation:Financial Management → General Ledger → Periodic Activity → Service Tax →

Adjust Service Tax Credit

In this form the user can adjust the remaining credits of service tax in document typeInvoice/Payment with credit memo and refund type Transactions.

Fields Description

Field DescriptionService Tax Registration No. Choose the service tax registration number

for which you want to adjust the credit of service tax.

Service Tax Group Code Choose the service tax group code for which you want to adjust the credit of

service tax.

Vendor Code Choose the vendor code for which youwant to adjust the credit of service tax.

Start Date Define the start date.

End Date Define the end date.

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Field DescriptionInput Service Distributor Place a check mark in this field if you want

to adjust the credit of service tax entriesrelated to input service distributor.

If this field is unchecked then the programwill allow you to adjust the credit of normalservice tax entries.

Adjustment in case of Input Service Distributor Entries

Click OK

The program will open the Adjust Service Tax Credit form.

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Select the combination of positive and negative entries by pressing the “Ctrl” button onyour key board.

Click the Function menu button and select the Adjust Credit menu item.

The program will adjust the service tax credit.

The program will reduce the remaining credits of service tax to zero.

Note 1: The user should select the combination of positive and negative at the time of adjustment of service tax entries.

Note 2: After adjustment, the program will adjust the remaining service tax, remainingservice eCess, and remaining service tax SHE Cess in the Service Tax Entry Detailwindow for document type Invoice/Payment.

Note 3: Adjusted service tax entry detail with some values in remaining credit fields of service tax, eCess and SHE Cess will be available for further distribution. If theremaining credit fields are having zero values then the program will not allow the user todistribute that particular entry.

Adjustment in case of Normal Service Tax Entries

Click OK

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The program will open the Adjust Service Tax Credit.

Select the combination of positive and negative entries by pressing the “Ctrl” button onyour key board.

Click the Function menu button and select the Adjust Credit menu item.

The program will adjust the service tax credit.

The program will reduce the remaining credits of service tax to zero.

Note 1: The user should select the combination of positive and negative at the time of adjustment of service tax entries.

Note 2: After adjustment, the program will adjust the remaining service tax, remainingservice eCess, and remaining service tax SHE Cess in the Service Tax Entry Detail

window for document type Invoice/Payment.

Note 3: Adjusted service tax entry detail with some values in remaining credit fields of service tax, eCess and SHE Cess will be available for Service tax as Credit. If theremaining credit fields are having zero values then transaction will not be available for service tax as excise credit.

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Service Tax Distribution

Navigation:Financial Management → General Ledger → Periodic Activity → Service Tax → Service Tax Distribution

This form is used in distributing input service tax amount to different locations.

Fields Description:Header – General tabFields DescriptionNo. Number of Service tax Distribution will flow

while pressing F3 to create new Service

Tax Distribution and the number which youhave defined in the General Ledger Setupwill flow in this field.

From Location Choose the From Location code fromwhere you want to distribute the inputservice tax.

Service Tax Group Code Choose the Service Tax Group Code from

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Fields Descriptionthe lookup list.

Distribution Basis Define the basis of distribution.

Posting Date Posting date will automatically transfer inthis field. You can change the posting date.

Line

Fields DescriptionTo Location Choose the To Location code from where

you are receiving the input service tax.

Distribution % Define the Distribution % for a particular location.

Distribution Amount The program will automatically calculatethe distribution amount on the basis of distribution %.

Shortcut Dimension 1 Code Choose the Global Dimension 1 Code youwant the G/L entries to be created with.

Shortcut Dimension 2 Code Choose the Global Dimension 2 Code youwant the G/L entries to be created with.

Loading on Services Account Place a check mark if you want to load theinput service tax amount on the Servicesaccount in case the To Location is not ataxable location.

On the footer level of the Service tax Distribution form following fields will get populated:

Fields Description Applied Amount The program will populate the amount of

service tax which has to be distributed.

Total Distribution % The program will populate the totaldistribution % of the document.

Total Distribution Amount The program will populate the totaldistribution amount which has to bedistributed.

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On the footer level of Service tax Distribution form following menu buttons will beavailable:

Menu Buttons DescriptionLine In Line menu button option to select

“Dimension” menu item to enter thedimensions for lines.

Function In Function menu button options to select“List” menu item to view the list of unposted service tax distribution forms. Other option is “Apply Entries” after selecting thisoption the program will open new form“Dist. Service Tax entries” through whichyou can select the service tax entrieswhich has to be distributed.

On the basis of From Location and ServiceTax Group Code, the program will filter theservice tax entries in the Dist. Service Taxentries.

Posting Click Posting menu button to post theservice tax distribution form.

Note 1: The program will allow the user to select input service tax credit entries for distribution if the header of the Service tax Distribution form contains “From Location”and “Service Tax Group Code”.

Note 2: Distribution % should be 100; if percentage of distribution is less than or morethan 100 then the program will give an error message for the particular Service taxDistribution form.

Note 3: The user is allowed to choose “To Location” on line level for only once in theParticular Service tax Distribution form. The user cannot repeat the same location in “ToLocation” filed for different %.

Note 4: If the user has posted some service tax entry for Input Service Distribution withBlank location through purchase transactions, then the user can keep the From Locationfield as “Blank”. Simultaneously if the user wants to transfer the service tax credit to H.O.(Company Information) then the user should keep the To Location field as “Blank”.

Note 5 : The user is not allowed to transfer the input service tax credit to the same inputservice distributor location from which the user wants to transfer. The program will notallow choosing the same input service distributor location both in “From Location” and“To Location”.

Note 6: The user can post the Service tax Distribution form with Global Dimension Code1 & 2 by entering directly in line or by using the Line menu button.

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Note 7: In case of loading on the Services account, the user has to place a check markin the “Loading on Services Account” field in the Service tax Distribution form. After posting, the program will debit the Services account and credit the Service TaxReceivable (distribution) account. But the program will not distribute the particular amount of service tax.

Note 8: Incase To Location is Input Service Distributor then the program will updateInput Service Distribution field with “Yes” in service tax entry and service tax entry detailwhich will be created in To location after posting service tax distribution form.

Note 9: when you post the Service tax Distribution form, then the program will reducethe remaining service tax credit, remaining service tax eCess credit, and remainingservice tax SHE Cess credit field to zero in the Service Tax Entry Detail form, for thetransaction which you have distributed. Also the program will store the distributionnumber in the particular entry.

Note 10: Once a service tax entry has been distributed then after the particular entry willnot be further available for the distribution.

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Distribution of Input Service Tax to Three Different Locations

In case some services are purchased in Blue location and amount of service tax has tobe distributed in Green, Red, and Silver locations @ 30%, 30% and 40% respectively.

Enter the following information on header level – General tab of the Service taxDistribution form.

No. : DS00102 (Press F3, and number will flow automatically)From Location : Blue Service Tax Group Code : Adv

Distribution Basis : Previous Year’s Profit Posting Date : 09/05/07

Click Function menu button and select Apply Entries menu item to select the service taxentry on the basis of From Location and Service Tax Group Code.

The program will open the Dist. Input Service Tax Credit form.

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Place a check in the Dist. Input Service Tax Credit field for the particular service taxentry which has to be distributed.

Click OK to close the form.

Note: The user can select multiple service tax entries for distribution.

After selecting service tax entries the program will show the service tax amount whichhas to be distributed in the Applied Amount field on the footer level of the Service taxDistribution form.

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Enter the following information on line level of Service tax Distribution form.

First Line

To Location : Green Distribution % : 30 Distribution Amount : 370.80

Second Line

To Location : Red Distribution % : 30 Distribution Amount : 370.80

Third Line

To Location : Silver Distribution % : 40 Distribution Amount : 494.40

On the footer level of Service tax Distribution form the program will show the following information:

Applied Amount: 1236.00 Total Distribution %: 100.00 Total Distribution Amount : 1236.00

Post the Service tax Distribution form.

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Navigation:Financial Management → General Ledger → History → Service Tax → Posted

Service Tax Distribution.

Click Navigate button to posted G/L entries

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The program will create G/L entries, Service tax entries in receiving locations andService Tax Distribution entries.

G/L entry

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Particulars Type Amount(Rs)Service Tax Recoverable A/C –Green Location

DR 370.80

Service Tax Receivable(Distribution) A/C – Blue Location CR 370.80

Service Tax Recoverable A/C –Red Location

DR 370.80

Service Tax Receivable(Distribution) A/C – Blue Location

CR 370.80

Service Tax Recoverable A/C –Silver Location

DR 494.40

Service Tax Receivable(Distribution) A/C – Blue Location

CR 494.40

The program will transfer the distributed service tax amount from the Service TaxReceivable (distribution) A/C to Service Tax Recoverable A/C and will store the locationcode in G/L entries.

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Service Tax Entry for Green Location

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Service Tax Entry Details for Green Location

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The program will store the location from where service tax credit has been received.

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Service Tax Entry for Red Location

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Service Tax Entry Detail for Red Location

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Service Tax Entry for Silver Location

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Service Tax Entry Detail for Silver Location

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1 st Service Tax Distribution entry

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Generating Invoice/challan from posted service tax distribution.

Click the Function menu button and select the Print invoice/Challan menu item

Click Preview menu button to generate the Invoice/challan

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Invoice/Challan to be issued to Green Location

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Invoice/Challan to be issued to Red Location

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Distribution of Service Tax Amount to Taxable and Non Taxable Locations

Let us consider a case in which some services which are purchased in Blue location and

amount of service tax has to be distributed in Green and White locations @ 50%, 50%.White location is not a taxable location. In this case you need to load the 50% servicetax amount to the Services account.

Enter the following information on header and Line level of the Service taxDistribution form.

Header

No. : DS00103 (Press F3, and number will flow automatically)From Location : Blue Service Tax Group Code : Adv Distribution Basis : Previous Year’s Profit Posting Date : 10/05/07

Click the Function menu button and select the Apply Entry menu item to select theservice tax entry on the basis of From Location and Service Tax Group Code.

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Select the service tax entry which has to be distributed.

Line

First Line

To Location : Green Distribution % : 50 Distribution Amount : 618

Second Line

To Location : White Distribution % : 50 Distribution Amount : 618 Loading on Services Account : Place check mark.

On the footer level of Service tax Distribution form the program will show the following information:

Applied Amount: 1236.00 Total Distribution %: 100.00 Total Distribution Amount: 1236.00


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Click Navigate button to posted G/L entries

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The program will create G/L entries, Service tax entries in receiving location and ServiceTax Distribution entries.

G/L entry

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The program will transfer the distributed service tax amount from the Service TaxReceivable (Distribution) A/C to the Service Tax Recoverable A/C. The program willstore the location code in G/L entries.

Also the program will create the G/L entry for loading on the Services account with sameoriginal document number which has been used while posting the invoice.


Particulars Type Amount(Rs)Service Tax Recoverable A/C –Green Location

DR 618

Service Tax Receivable(Distribution) A/C – Blue Location CR 618

Particulars Type Amount(Rs) Advertisement A/C DR 618Service Tax Receivable(Distribution) A/C – Blue Location

CR 618

The program will load the amount on the Service account by debiting it and credit theService Tax Receivable (Distribution) A/C. No service tax entry will be created for thisamount.

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Service Tax entry for Green location

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Service Tax Entry detail for Green location

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1 st Service Tax Distribution entry

The program will update all relevant information in service tax distribution entry whichhas to be generated in the Input Service Distribution register.

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2nd Service Tax Distribution entry

The program will update all relevant information in service tax distribution entry whichhas to be generated in the Input Service Distribution register. In this entry, Loaded onServices Account field has the value as “Yes”.

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View the list of posted service tax distribution through the Posted Service TaxDistribution form.

To view the list of posted service tax distribution, either click the Function menu buttonand select List or press F5.

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The program will open Posted Distribution list from which you can select the particular Posted Service Tax Distribution.

Reports

Input Service Distribution Register

Navigation:Financial Management → General Ledger → Reports → Service Tax Reporting→ Input Service Distribution Register.

This report will give you the complete information regarding service tax entries related toInput Service Distributor. Information about Input service tax credit amount received from

service provider and further distributed to various locations.

Fields Description

Fields DescriptionPosting Date Enter the posting date for which you want

to generate the report.

Service tax Group Code Choose the Service Tax Group Code for which you want to generate the report.

Location Code Choose the location code for which youwant to generate the report.

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The program will generate the Input Service Distribution register with all relevantinformation.

Service Tax Distribution Invoice/Challan

Navigation:Financial Management → General Ledger → Reports → Service Tax Reporting→ Service Tax Distribution Invoice/Challan.

The user can generate Invoice/challan which has to be issued to the locations whereinput service tax credit has been distributed.

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Fields Description

Fields DescriptionFrom Location Choose the From Location for which you


To Location Choose the To Location for which youwant to generate the report.

Distribution Challan No. Choose the Distribution challan number which has to be generated.

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The program will generate invoice/challan with all relevant information .

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Appendix

Examples:

a . Bra nc h “ A” (Reg iste red Inp ut Service Distrib uto r) has p a id the invo ice o f Rs99000 inc luding service ta x of Rs 9000 for the c om mo n service . The ot herb ra nc hes a re X, Y, and Z. All the b ra nc hes a re p rovid ing the ta xa b le servic esand are ma nufac turer of taxab le g ood s.

The a mo unt o f service ta x as: Rs.9000 should b e d istrib ute d a mo ngthree b ranc he s. The servic e ta x distribution ra tio is 1:6:2. The servic eta x to b e d istributed a s:

X Rs 1000Y Rs 6000Z Rs 2000

The follow ing e ntries will be p a ssed a t the time o f p a ymen t o f servic es a ndservic e ta x b y the b ranc h A:

Pa rticula rs Deb it Rs Credit RsServic es A/ C 90000Servic e Ta x Cred it (Distribution )a / c

9000

Ca sh/ Ba nk 99000

The follow ing entries will be p a ssed a t the time o f d istributing the c red it to thebranches:

Pa rticula rs Deb it Rs Credit RsService ta x Rec eiva b le X A/ C 1000Service ta x Rec eiva b le Y A/ C 6000Service ta x Rec eiva b le Z A/ C 2000Servic e Ta x Cred it (Distribution )A/ C

9000

b . Bra nc h “ A” (Reg iste red Inp ut Service Distrib uto r) has p a id the invo ice o f Rs66000 inc luding service ta x of Rs 6000 for the c om mo n service . The ot herb ra nc hes a re X, Y a nd Z. The b ra nc hes X a nd Y a re p rovid ing the ta xa b leservic es a nd a re m a nufa c turer of taxab le g oo d s. Z is p roviding th e e xem p tedservic es and is a ma nufac ture o f exemp ted go od s.

The servic e ta x a mo unt a ttrib uta b le to the b ra nc h Z whic h isengaged in providing exempted services or is a manufacturer ofexemp ted go od s is Rs 1000 whic h c a nnot b e d istrib uted .

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The service ta x to b e d istribute d is 5000 (6000-1000)The service ta x distrib ution ratio is 3:2; the service ta x to b ed istrib ute d a s:

X Rs 3000Y Rs 2000

The follow ing e ntries will be p a ssed a t the time o f p a ymen t o f servic es a ndservic e ta x b y the b ranc h A:

Pa rticula rs Deb it Rs Credit RsServic es A/ C 60000Servic e Ta x Cred it (Distribution )A/ C

6000

Ca sh/ Ba nk 66000

The follow ing entries will be p a ssed a t the time o f d istributing the c red it to thebranches:

Pa rticula rs Deb it Rs Credit RsService ta x Rec eiva b le X A/ C 3000Service ta x Rec eiva b le Y A/ C 2000Servic e Ta x Cred it (Distribution )A/ C

5000

For Loc a tion Z, the G / L en try will be :

Pa rticula rs Deb it Rs Credit RsServic es A/ C 1000Servic e Ta x Cred it (Distribution )A/ C

1000

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Microsoft ® Business Solutions–Navision ® 4.0- TDS Certificate Receivable

from Customer

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Comprehensive Functionality ............................................................................3 Reports..............................................................................................................3

TDS Certificate Receivable from Customer ..........................................................3 Transactions .........................................................................................................4

Payment transaction of Customer .....................................................................4 Sales Transaction..............................................................................................5

Update TDS Certificate Details .............................................................................7 Assign TDS Cert. Details.................................................................................10 Update TDS Cert. Details................................................................................12 Rectify TDS Cert. Details ................................................................................17 Rectification of wrong assignment to entry ......................................................18

Reports ...............................................................................................................20 TDS Certificate Receivable report ...................................................................20

TDS Certificate Summary report .....................................................................24

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Overview

TDS Certificate Receivable from Customer functionality enables to track the TDScertificate receivable from customers.


TDS Certificate Receivable from Customer functionality comprehensively covers thefollowing:

• Identification of transactions against which TDS Certificate is receivablefrom customer.

• Updation of received TDS certificate details against the transaction.• Generation report of transactions against which TDS certificate is

receivable from customer.• Generation report of transactions against which TDS certificate is

received from customer.

Reports

The TDS Certificate Receivable functionality provides detailed report of transactionsagainst which TDS Certificate is either receivable or received. The functionality alsoprovides a report based on customer and TDS receivable group for the transactionsagainst which TDS Certificate is received.

TDS Certificate Receivable from CustomerTDS is a withholding tax, where tax is deducted at the time of making the payment or booking of the invoice by the customer, whichever is earlier. As per the Income Tax Act,tax need to be deducted by the payer when the payment is of a specific nature.

If the TDS is deducted against the concern then the user has to keep the proper trackingof TDS deducted by the customer as the user has to receive TDS certificate from thecustomer.

A proper tracking of the TDS certificate is important for an organization as it is a valuable

document and is also an asset for the organization. A proper mechanism is required totrack the receipt of TDS certificates.

TDS Certificate Receivable from Customer functionality provides a proper mechanism totrack the receipt of TDS certificates in the following ways:

• Will Keep track of transactions against which TDS certificates are to bereceived from customers

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• Stores the tax deducted by the customers, against different types of servicesrendered

Transactions

Payment transaction of Customer



Field Description

TDS Certificate Receivable Place a check mark in this field if TDScertificate is receivable against thetransaction.

Note: You can also post the transaction with TDS Certificate Receivable check markfrom the Cash Receipt Journals, Cash Receipt Voucher, and Bank Receipt Voucher,

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Sales Transaction



No 10000 TDS Certificate Receivable True

Enter the following on the Sales Order line

Type G/L Account No. 8410 Description Advertising Quantity 1

Unit Price 40000 Line Amount 40000


The program posts the Sales Order as Sales Invoice with the document number SI-B-100384

Navigate the Sales Invoice with the document number SI-B-100384

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Open the Customer Ledger entry.

The program populates a check mark in TDS Certificate Receivable field in theCustomer Ledger Entry window.

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Update TDS Certificate Details

Navigation:Financial Management → General Ledger → Periodic Activities → TDSReceivable from Customer → Update TDS Certificate Details.

The program opens the Update TDS Certificate Details window

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Functions menu Button:

Options Description Assign TDS Cert. Details To open the Assign TDS Cert. Details

window, click the Functions menu buttonand then choose the Assign TDS Cert.Details menu item. You must enter thevalue in the Customer No field to open the

Assign TDS Cert. Details window.

Update TDS Cert. Details To open the Update TDS Cert. Detailswindow, click the Functions menu buttonand then choose the Update TDS Cert.Details menu item. You must enter thevalues in all fields to open the Update TDSCert. Details window.

Rectify TDS Cert. Details To open the Rectify TDS Cert. Detailswindow, click the Functions menu buttonand then choose the Rectify TDS Cert.Details menu item. You must enter thevalue in the Customer No field to open theRectify TDS Cert. Details window

.

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Assign TDS Cert. Details

Assign TDS Cert. Details window contains customer ledger entries which are notidentified as entry against which TDS certificate is receivable.

No any entry in this window has a check mark in the TDS Certificate Receivable field. If a check mark is placed in the TDS Certificate Receivable field and the window is closed,then the program will remove the entry from this window.

The program generates entry in the Update TDS Cert. Details window .

Navigation:Financial Management → General Ledger → Periodic Activities → TDS

Receivable from Customer →

TDS Certificate Receivable

Select 1000 in the Customer No. field.

Click the Functions menu button and select the Assign TDS Cert. Details menu item.

The program opens the Assign TDS Cert. Details window.

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Place a check mark in the TDS Certificate Receivable field for entry number: 8528.

Close the Assign TDS Cert. Details window. The program will delete the entry number 8528 from the Assign TDS Cert. Details window and will generate the same entry in theUpdate TDS Cert. Details window.

Note :The Assign TDS Cert. Details window can also be opened from the following:

Navigation:Financial Management → General Ledger → Periodic Activities → TDSReceivable from Customer → Assign TDS Cert. Details

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The program opens the Assign TDS Cert. Details window with relevant entries of allcustomers.

Update TDS Cert. Details

The Update TDS Cert. Details window contains customer ledger entries against whichTDS certificate is receivable.

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All entries in this window have a check mark in the TDS Certificate Receivable field. If the check mark is removed from this field and the OK button is clicked, then the programwill remove the entry from this window. The program generates the same entry in the

Assign TDS Cert. Details window.

No any entry in this window has a check mark in the TDS Certificate Received field. If acheck mark is placed in the TDS Certificate Received field and OK button is clicked, thenthe program will remove the entry from this window. The program will generate the sameentry in the Rectify TDS Cert. Details window.

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Navigation:Financial Management → General Ledger → Periodic Activities → TDSReceivable from Customer → Update TDS Certificate Details

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Fill in values in the Update TDS Certificate Details window as:

Customer No 1000 Certificate No CONT/0708/01 Date of Receipt 31-05-07 Certificate TDS Amoun t 5,000.00

Financial Year 200708 TDS Receivable Group Contractor

Click the Functions menu button and select the Update TDS Cert. Details menu item.

The program opens the Update TDS Cert. Details window.

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Note :In the above window the program generates the entry number 8524, 8526 and 8530after posting the transactions. The program generates the entry number 8528 when TDSCertificate Receivable field is checked in the Assign TDS Cert. Details window.

Place a check mark in TDS Certificate Received field for entry number 8526, 8530, and8528.

Click the OK button.

The program deletes the entry number 8526, 8530, and 8528 from the Update TDS Cert.Details window.

The program will generate the entry number 8526, 8528 and 8530 in the Rectify TDSCert. Details window with the updated values.

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Rectify TDS Cert. Details

This window contains customer ledger entries against which TDS certificate is received.

All entries in this window have a check mark in the TDS Certificate Received field.If check mark is removed from the TDS Certificate Received field, then the programdeletes the values from following fields:

• Certificate No.• TDS Certificate Rcpt Date• TDS Certificate Amount• Financial Year

The program also deletes entry from the window.

These entries get populated in the Update TDS Cert. Details window.


Click the Functions menu button and select the Rectify TDS Cert. Details menu item.

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The program generates entries in the TDS Cert. Details window with TDS Certificatedetails.

The program generates values in following fields from values entered in UpdateTDS Certificate Details window

Certificate No. CONT/0708/01 TDS Certificate Rcpt Date 31-05-06 TDS Certificate Amount 5,000 Financial Year 200708 TDS Receivable Group Contractor

Rectification of wrong assignment to entry

The program allows rectifying the wrong assignment to entry. In case TDS Certificate is

not receivable against the entry number 8526, then the program allows rectifying theerror.

Open the Rectify TDS Cert. Details window


Click the Functions menu button and select the Rectify TDS Cert. Details menu item .

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Remove the check mark from the TDS Certificate Received field against the entrynumber 8526.

The program deletes the TDS certificate details from entry number 8526.

Close the Rectify TDS Cert. Details window.

The program deletes the entry number 8526 from the Rectify TDS Cert. Details window.

Open the Update TDS Receivable window.


Click the Functions menu button and select the Update TDS Cert. Details menu item .

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The program generates the entry number 8526 in the Update TDS Cert. Details window.

Remove the check mark from the TDS Certificate Receivable field and click the OKbutton.

The program deletes the entry number 8526 from the Update TDS Cert. Details window.

The program generates entry number 8526 in the Assign TDS Cert. Details window.

Reports

TDS Certificate Receivable report

TDS Certificate Receivable report shows the transaction details against which TDScertificate is either received or receivable.The following details will get populated in the TDS Certificate Receivable report:

• Company Name• Customer No.• Customer Name• Customer Address• Document Type• Document No• Document Date• TDS certificate received(Yes or No)• TDS cert Receivable Group• Certificate No• TDS Certificate Rcpt date• Certificate TDS Amount(Rs)• Financial Year

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Navigation:Financial Management → General Ledger → Reports → TDS Receivable fromCustomer → TDS Certificate Receivable

The program opens the TDS Certificate Receivable window

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Fields Description

Cust. Ledger Entry Tab

Fields DescriptionCustomer No. Choose the customer no. for which you

want to generate the reportTDS Receivable Group Choose the TDS Receivable Group for

which you want to generate the reportDocument No. Enter the document no. for which you want

to generate the report

Certificate Received Enter Yes if you want to generate thereport for certificates received other wiseenter no. If this field is blank then programwill generate the report for both.

Posting Date Enter the posting date for which you wantto generate the report.


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TDS Certificate Summary report

The TDS Certificate Summary report shows the TDS certificate details with TDS Groupwise. The following details will get populated in the TDS Certificate Summary report:

•

Company Name• Customer No.• Customer Name• Customer Address• TDS cert Receivable Group• Certificate No• TDS Certificate Rcpt date• Financial Year • Certificate TDS Amount(Rs)• TDS Certificate Received group total

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The program opens the TDS Certificate Summary window.

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Cust. Ledger Entry

Fill in the values as per following instructions:

Field DescriptionCustomer No. Choose the customer no. for which you

want to generate the report

Posting Date Enter the Posting date for which you wantto generate the report

TDS Receivable Group Choose the TDS receivable group for which you want to generate the report


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Microsoft ® Business Solutions–Navision ® 4.0- CST Set off against VAT

Carried forward and VAT DefermentPeriod

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Detailed Setup...................................................................................................3 Comprehensive Functionality ............................................................................4 Reports..............................................................................................................4 Setup- Sales Tax...............................................................................................5 States ................................................................................................................6 Deferment Period ..............................................................................................7

Calculation of VAT on Capital Goods....................................................................8 Deferment Schedule to be calculated on the basis of Financial Year................8

Viewing the Posted Transaction ..................................................................12 Deferment Schedule to be calculated on the basis of Calendar Year .............14

Viewing the Posted Transaction ..................................................................19 Deferment Schedule to be calculated on monthly basis..................................21

Viewing the Posted Transaction ..................................................................26 Deferment Schedule to be calculated on the basis of Financial Year in case of Fixed Asset .....................................................................................................28

Viewing the Posted Transaction ..................................................................33 VAT Settlement...................................................................................................35

Viewing the Posted Transaction ..................................................................39 VAT Reporting ....................................................................................................41

VAT Settlement ...............................................................................................41 Appendix.............................................................................................................43

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This functionality enables the user to calculate the deferment schedules on the basis of financial year and calendar year. It also helps to setoff the VAT credit that has beencarry forward from previous period against Current CST Payable.

Detailed Setup

VAT functionality contains a detailed setup, which is used in mapping the Tax Rate,calculation of Input VAT Credit, Output VAT, VAT Adjustments, and the VAT Settlementprocess.


T.I.N. Nos. Define the various TIN numbers of the firm.

States Define the State/Union Territory, first two-digits of the TIN of the State, Defermentsfor the Capital Goods, Schedules of theState, Specified Period for Refund, TaxPeriod, Deferment Period, Financial Year check mark, Retention Limit incase of Branch Transfer, GL account for Input VATcredit, GL Account for Output Tax, GL

Account for VAT Deferred Account, GL Account for VAT Payable Account, GL Account for VAT Refund, and GL Account

for Excess Input VAT Credit Carriedforward.

Tax Groups Define the item categories and the Itemcategory, which is a work contract.

Tax Jurisdictions Define the tax jurisdiction, the state under which it falls, tax type, and retention limitfor non taxable sales. Also define whether this retention limit is loaded on the item or not.

Tax Details Define tax jurisdiction, item category,schedule, tax rate, capital goods,creditable goods, standard deduction,VATable purchase tax, and VAT retention.

Schedules Define all schedules for states.

Tax Area Locations Define the tax jurisdiction applicable for customer/ vendor state with location.

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Item Card If the item is a fixed asset, and the Tax

Group code for the item is defined.

Vendor Card Define the TIN number of the vendor. Alsodefine whether the vendor has opted for composition or not.

Customer Card Define the TIN number of the customer. Also define whether the sale to customer isExport/ Deemed Export Sale or VATExempted Sale.

Location Card Define the TIN number of the location,location under composition and export/deemed export location.

GL Account Card Define the Tax Group Code.


This functionality comprehensively covers the following points:

• Calculation of Deferment Schedule in case of purchase of capital goods on the basisof financial year.

• Calculation of Deferment Schedule in case of purchase of capital goods on the basisof calendar year.

• Calculation of Deferment Schedule in case of purchase of capital goods onmonthly/quarterly/half-yearly basis.

• VAT Credit which has been carry forward from previous period can be adjusted(Setoff) against current period CST payable through the VAT Settlement form.

Reports

Under this functionality VAT Settlement report can be generated with a newly introducedfield as: “Setoff against Current CST”.

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Setup- Sales Tax

Navigation: Financial Management → Setup → Sales Tax

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States

Navigation: Financial Management → Setup → Sales Tax → States

Fields Description:

Field DescriptionDeferment Period This field contains the period for

deferment. Number of deferments will becalculated; based on the value in this field.

Note :The value in this field should be 1Y for calculating deferments on the basis of Financial Year.

Financial Year Place a check mark in this field if thenumber of deferments has to be calculatedon the basis of Financial Year.

Note: This field will be checked in casedeferment period is 1Y.

For example :If capital goods is purchased on any day of the financial year (say 22/08/07) and isallowed to take the credit of Input VAT onthe basis of Financial Year.

In this case the deferment schedules willbe:• First deferment schedule on 22/08/07• Second deferment schedule on

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Field Description01/04/08

• Third deferment schedule on 01/04/09

Deferment Period

Navigation: Financial Management → Setup → Sales Tax → States → State → DefermentPeriod

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Enter the following fields in the Jurisdiction Deferments Periods form:

State Code : ND Effective Date: 01-04-07 Starting Threshold Amount : 0.00 Closing Threshold Amount : 100000.00 No. of Deferments: 2

Close the window

Calculation of VAT on Capital Goods.

Deferment Schedule to be calculated on the basis of Financial Year

In the State Setup, Tax Period is 1M, Deferment Period is 1Y, Financial Year field ischecked, and No. of Deferments in the J urisdiction deferments Period form is 2.


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On the Header

Vendor: 10000 (Delhi Postmaster)Location: Blue Structure: VAT (In Structure, Order Detail Type should be

“Sales Tax”)

On the LineItem: 1001 ((Touring Bicycle) Fixed Asset field should be

checked in the Item Card) Quantity: 10 Direct Unit cost excluding VAT: 50000 Line Amount Excluding VAT: 500000 (The program will calculate it.)

Place a check mark in the Fixed Asset field in the Item Card.


The program will calculate the VAT and will show the VAT amount in the Input TaxCredit Amount field.


Click the Order menu button and select Deferment Schedule.

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The program will create the deferment entries according to the defined defermentperiods in the State setup.

The program will create the deferment schedule on the basis of financial year.

First Schedule (Posting Date): 25/08/07 Second Schedule (Posting Date): 01/04/08 Third Schedule (Posting Date): 01/04/09


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Enter the value in the Document No. field as: 106506

Click Preview.

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G/L Entry

The program creates the following entry: Particulars Type Amount (Rs.)Finished Goods Dr. 500,000.00Direct Cost

AppliedCr. 500,000.00

Finished Goods Cr. 496,494.05PurchaseVariance

Dr. 496,494.05

Purchase A/C Dr. 500,000.00VAT Deferment

A/CDr. 62,500.00

Vendor A/C Cr 562,500.00


Base Value: 500000 VAT %: 12.50 Tax Amount: 62500 ITC: 62500

The program will also create Detailed Tax Entries.

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The program will create three detail tax entries, because we have defined two numbersof deferments in the setup. For the first entry deferment number will be “0”, for thesecond entry deferment number will be “1”, and for the third entry deferment number willbe “2”.

The program creates the following detailed tax entries with the following posting dates:

First Detailed Tax Entry (Posting Date): 25/08/07 Second Detailed Tax Entry (Posting Date): 01/04/08 Third Detailed Tax Entry (Posting Date): 01/04/09

The posting dates have been calculated on the basis of the financial year.

Note 1: Fixed Asset Deferments will be created if per unit cost price of fixed asset islying between the starting and ending threshold amount.

Note 2: It is mandatory to place a check mark in the Capital Goods fields in the TaxDetails setup if you want to calculate the Deferments Schedules for fixed assets.

Note 3: The same can be done if you are using the Fixed Asset module. In this case youneed to create the FA card and have to mention the tax group code in the FA card.

Note 4: If you are not using the FA Module and still want to make deferments for Fixed Asset then you should place a check mark in the Fixed Asset field in the Item card.

Note 5: The program will allow placing a check mark in the Financial Year field in theState setup if the Deferment Period field has value as “1Y” in the State setup.

Note 6: You can also create deferment schedule on the basis of financial year throughthe VAT Opening Journal.

Calculation of VAT for fixed asset can also be done through the Purchase Invoice.

Deferment Schedule to be calculated on the basis of Calendar Year

In the State Setup, Tax Period is 1M, Deferment Period is 1Y, Financial Year field isunchecked and No. of Deferments in the Jurisdiction Deferments Period form is 2.


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On the Header


“Sales Tax”)

On the Line

Item: 1001 ((Touring Bicycle) Fixed Asset field should be checked in the Item Card)

Quantity: 10 Direct Unit cost excluding VAT: 50000 Line Amount Excluding VAT: 500000 (The program will calculate it.)




You can view the deferment schedule before posting the Purchase Order.


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The program will create the deferment schedule on the basis of the calendar year.


You can print the deferment schedule before posting .

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Click Preview .

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G/L Entry

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Particulars Type Amount (Rs.)Finished Goods Dr. 500,000.00Direct Cost



Dr. 496,494.05


A/CDr. 62,500.00





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The posting dates have been calculated on the basis of the calendar year.

Note 1 : Fixed Asset Deferments will be created only if the per unit cost price of fixedasset is lying between the starting and ending threshold amount.

Note 2: It is mandatory to place a check mark in Capital Goods fields in Tax Detailssetup if the user wants to calculate Deferments Schedules for fixed assets.





Deferment Schedule to be calculated on monthly basis.

In the State Setup, Tax Period is 1M, Deferment Period is 1M, Financial Year field isunchecked, and No. of Deferments in the J urisdiction Deferments Period form is 2.


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On the Header


“Sales Tax”)

On the LineItem: 1001 ((Touring Bicycle) Fixed Asset field should be

checked in the Item Card) Quantity: 10 Direct Unit cost excluding VAT: 50000 Line Amount Excluding VAT: 500000 (The program will calculate it.)






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The program will create the Deferment Schedule on monthly basis.


You can print deferment schedule before posting .

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Click Preview .

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G/L Entry

The program creates the following entry: Particulars Type Amount (Rs.)Finished Goods Dr. 500,000.00Direct Cost



Dr. 496,494.05


A/C

Dr. 62,500.00





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The posting dates have been calculated on Monthly basis.


Note 2: It is mandatory to place a check mark in the Capital Goods field in the TaxDetails setup if you want to calculate the Deferments Schedules for fixed assets.



Note 5: You can also create deferment schedule on monthly basis through the VATOpening Journal.

Note 6: If the Tax Period is 1M and Deferment Period is 6M, then the program will

create deferment schedule after every six months.


Deferment Schedule to be calculated on the basis of Financial Year in case of Fixed Asset

In the State Setup, Tax Period is 1M, Deferment Period is 1Y, Financial Year field ischecked, and No. of Deferments in the J urisdiction deferments Period form is 2.


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On the Header


“Sales Tax”)

On the LineType: Fixed Asset No.: FA000010 Quantity: 10 Direct Unit cost excluding VAT: 50000 Line Amount Excluding VAT: 500000 (The program will calculate it.)





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The program will create the deferment schedule on the basis of financial year.



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Click Preview.

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G/L Entry

The program creates the following entry: Particulars Type Amount (Rs.)Increases duringthe Year

Dr. 500,000.00

VAT Deferment A/C

Dr 62,500.00

Purchase A/C Cr. 562,500.00





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The posting dates have been calculated on the basis of the financial year.


Note 2: It is mandatory to place a check mark in the Capital Goods fields in the TaxDetails setup if you want to calculate the Deferments Schedules for fixed assets.


Note 4: The program will allow placing a check mark in the Financial Year field in theState setup if the Deferment Period field has value as “1Y” in the State setup.



VAT Settlement

Navigation: Financial Management → General Ledger → Periodic Activities → Value AddedTax → VAT Settlement.

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Field Description

Field Description

Setoff against Current CST Enter the amount which has been carriedforward from previous period and has to be

setoff against current CST liability.

The program will not allow you to enter thevalue in this field under the followingconditions:

• If amount is more than CSTPayable.

• If amount is more than the carry

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Field Descriptionforward from previous periodamount less refund amount lessSetoff against Current VAT amount.

In the above VAT Settlement form, following fields are showing values as:

Carry forward from the previous period : 83,333.32

CST Payable : 100,000.00

VAT Payable : 10,416.67

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Now, enter the values to be adjusted in setoff against current VAT field and setoff against current CST field and in refund field.

Enter the following fields in the VAT Settlement form :

Refund : 10,000.00 Setoff against current VAT .: 10,000.00 Setoff against current CST : 63,333.32

After entering values in the above fields, following fields will get changed automatically:

Carry forward : 0.00 VAT Payable : 416.67 Net VAT Payable : 416.67 Net CST Payable .: 36,666.68

Note: Amount that has been carried forward from previous period has been adjusted(setoff) against current period CST payable.

Post the VAT Settlement form.

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Navigation:


General Ledger →

History→

Navigate

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G/L Entry


Particulars Type Amount (Rs.)Sales Tax A/C(Sales)

Dr. 31,250.00

VAT Payable A/C Cr. 31,250.00VAT Payable A/C Dr. 20,833.33VAT Deferment

A/CCr. 20,833.33

VAT C/F A/C Cr. 83,333.32VAT Refund A/C Dr. 10,000.00VAT Payable A/C Dr. 10,000.00VAT Payable A/C Dr. 63,333.32Sales Tax A/C(Sales)

Dr. 100,000.00

VAT Payable A/C Cr. 100,000.00

Note 1: You can enter the value in the Setoff against current CST field in the VATSettlement form, which is not more than CST Payable and not more than carry forwardfrom previous period amount less refund amount less setoff against current VATamount.

Note 2: Program will not allow you to post the VAT Settlement form if the Previous TaxPeriod VAT Settlement form is not settled.

Note 3: Program will not allow you to Undo Post the VAT Settlement form if the NextTax Period VAT Settlement form is settled.

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VAT Reporting

VAT Settlement

Navigation:Financial Management → General Ledger → Reports → VAT Reporting → VATSettlement.

Enter the following information on the VAT Settlement tab:

State Code: ND

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Enter the following information on the Options tab:

Starting Date: 01-09-07

The program will automatically fill the Ending Date field (30-09-07)

To print the report, click Print. To see the report on screen, click Preview. If you want toprint it later, click Cancel.

Note: You can generate the VAT Settlement report only for the period that has beensettled through the VAT Settlement form.

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Appendix

Case 1: Take an example of a company that purchases capital goods and VAT

deferment period is three financial years starting from the date of acquisition:

XYZ Ltd. purchases capital goods from A Ltd. for Rs. 40,000 as on 10-02-07. VAT ispayable @10%. For the state, VAT Deferment period is three years from the date of purchase of an asset. A year starts from 1st April and ends on 31st March.

Now, the VAT deferment period will be as follows:

1st Schedule - 10-02-072nd Schedule - 01-04-073rd Schedule - 01-04-08

VAT payable is calculated as follows:40,000 @ 10% = Rs.4000

The VAT dealer can take the input credit for the capital goods in three installments whichare as follows:

Amount for each installment = 4000/3 = Rs.1333

On 10-02-07 - Rs.1333On 01-04-07 - Rs.1333On 01-04-08 - Rs. 1334

Case 2: In case company purchases capital goods and VAT deferment period is threeyears starting from the date of acquisition:

XYZ Ltd. purchases capital goods from A Ltd. for Rs. 60,000 as on 10-02-07. VAT ispayable @10%. For the state, VAT Deferment period is three years from the date of purchase of an asset.

Now, the VAT Deferment period will be as follows:

1st Schedule - 10-02-072nd Schedule - 10-02-083rd Schedule - 10-02-09

VAT payable is calculated as follows:60,000 @ 10% = Rs.6000

The VAT dealer can take the input credit for the capital goods in three installments,which are as follows:


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On 10-02-07 - Rs.2000On 10-02-08 - Rs.2000On 10-02-09 - Rs.2000

Case 3: Take another example of a company that purchases capital goods and VATdeferment period is 36 months starting from the date of acquisition:

XYZ Ltd. purchases capital goods from A Ltd. for Rs.180000 as on 10-02-07. VAT ispayable @ 10%. For the state, VAT Deferment period is 36 months from the date of purchase of an asset.

Now the VAT Deferment period is as follows:

1st Schedule - 10-02-072nd Schedule - 10-03-073rd Schedule - 10-04-07……..……..Up to….36th Schedule - 10-01-10

VAT payable is calculated as follows:180000 @ 10% = Rs.18000

The VAT dealer can take the input credit for the capital goods in 36 equal monthlyinstallments which are as follows:


On 10-02-07 - Rs.500

On 10-03-07 - Rs.500On 10-04-07 - Rs.500……..……..Up to….On 10-01-10 - Rs.500

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Microsoft ® Business Solutions–Navision ® 4.0- ADC VAT Calculation

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Setups Required ...................................................................................................5 Excise Setup .....................................................................................................6

Duties ............................................................................................................7 Posting Setup ................................................................................................8 Claim Setoff .................................................................................................11

Structure..........................................................................................................12 Calculation of CVD and ADC through Purchase Transactions ...........................14

Calculation of CVD in case of Normal Item through Purchase Order/Invoice..14 Viewing the Posted Transaction ..................................................................16

Calculation of CVD in case of Capital Item through Purchase Order/Invoice ..24 Viewing the Posted Transaction ..................................................................25

Calculation of CVD through Purchase Credit Memo .......................................35 Viewing the Posted Transaction ..................................................................37

Calculation of CVD through Sales Order .........................................................44 Viewing the Posted Transaction ..................................................................45

Calculation of CVD through Transfer Order ....................................................50 Transfer of Normal Items .............................................................................50 Viewing the Posted Transaction (Transfer Shipments) ................................52 Viewing the Posted Transaction (Transfer Receipts)...................................57 Transfer of Capital Items .............................................................................62 Viewing the Posted Transaction (Transfer Shipments) ................................64 Viewing the Posted Transaction (Transfer Receipts)...................................71

Excise CENVAT Claim ....................................................................................80 Calculation of CVD and ADC in case of Trading Items.......................................84

Calculation of CVD in case of Trading Item through Purchase Order .............84 Viewing the Posted Transaction ..................................................................86

Calculation of CVD in case of Trading Item through Sales Order....................93 Viewing the Ledger Entries..........................................................................94

Calculation of CVD in case of Trading Item through Purchase Return Order100 Viewing the Ledger Entries........................................................................101

Calculation of CVD in case of Trading Item through Sales Return Order......106 Viewing the Ledger Entries........................................................................107

Normal Goods Purchased for Trading and Further Transferred for Manufacturing

..........................................................................................................................112 Transfer of Goods to Manufacturing Unit from Trading Unit (through Item Reclass Journal) ................................................................................................112

Viewing the Ledger Entries........................................................................114 Capital Goods Purchased for Trading and further Transferred for Manufacturing..........................................................................................................................116

Transfer of Capital Goods to Manufacturing Unit from Trading Unit..............117 Viewing the Ledger Entries........................................................................118

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Transfer of Goods to Manufacturing Unit from Trading Unit through Transfer Order Form....................................................................................................121

Viewing the Posted Transaction (Transfer Shipments) ..............................122 Viewing the Posted Transaction (Transfer Receipts).................................125

Transfer of Capital Goods to Manufacturing Unit from Trading Unit through

Transfer Order Form .....................................................................................128

Viewing the Posted Transaction (Transfer Shipments) ..............................130 Viewing the Posted Transaction (Transfer Receipts).................................133

Appendix...........................................................................................................138

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Additional duty of Custom (CVD) equivalent to duty of excise and Additional duty of customs equivalent to value Added tax, Sales Tax, or local tax are specified for thepurpose of eligibility of CENVAT.

Additional duty of customs equal to the, excise duty leviable on like goods produced or manufactured in India. This is levied under Section 3 of Customs Tariff Act, 1975. This isusually referred to as "Countervailing Duty" (CVD). However, the correct description of this duty is Additional Duty of Customs. In order to determine the applicable rate, theuser has to obtain the correct classification of the goods under the Central Excise Tariff

Act, 1986. The duties under the Central Excise Tariff are on ad valorem basis. However,specific rates have been prescribed for some items.

Detailed Setup

CVD functionality contains the detailed setup of Excise and Structure which you need tocreate before calculating CVD and ADC VAT.

Followings are the setups required for calculating CVD and ADC.



Following are the comprehensive functionalities covered under CVD in case of NormalItems and Capital Goods:

• Calculation of CVD and ADC VAT through Purchase, Sale Order/Invoice.• Updation of RG 23 A/C Part I & II registers.• Additional duty in lieu of VAT is not available for deferments in case of purchase

of capital item.• Additional duty component is not available for settlement of service tax on output

service.•

Settlement of one duty element against multiple sub-duty elements.• Calculation of CVD in case of purchase of trading items.• CVD can also be calculated while transferring goods from trading unit to

manufacturing unit.• Updating RG 23 D and Quarterly Return for Traders reports.

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Reports

All statutory reports related to excise for example RG 23 A Part I & II, RG 23 C Part I &II, RG 23 D, and Quarterly Return for Traders will get updated with this functionality .

Setups Required

Followings are the setups required to be fill for calculating CVD and ADC.


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Excise Setup

Navigation:Financial Management General Ledger → Setup → Excise

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Duties

Navigation:

Financial Management → General Ledger → Setup → Excise → Duties

In the Excise Duties setup, following new codes has been introduced for the calculationof CVD and ADC:

• ADC VAT Amount• BCD Amount• CIF Amount• Custom E CESS Amount• Custom SHE CESS Amount

These codes will be used for setting up the calculation formulas in the Excise Postingsetup .

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Posting Setup

Navigation:Financial Management → General Ledger → Setup → Excise → Posting Setup

Fill in the fields according to these guidelines for calculating CVD and ADC:

Fields Description

Excise Bus. Posting Group Choose the excise business posting groupfrom the lookup list.

Excise Prod. Posting Group Choose the excise production postinggroup from the lookup list.

From Date Enter the date, from which you want to

calculate CVD and ADC.

CENVAT Cr. Receivable Account Choose the CENVAT Cr. Receivable Account from the lookup list.

CENVAT Cr. Receivable (Trading) Choose the CENVAT Cr. Receivable(Trading) from the lookup list.

CENVAT Transferred (Trading) Choose the CENVAT Transferred(Trading) from the lookup list.

Excise Payable Account Choose the Excise Payable Account fromthe lookup list.

CENVAT Cr. (Deferred) Account Choose the CENVAT Cr. (Deferred) Account from the lookup list.

BED Calculation Type Choose the BED Calculation type fromdrop down button.

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BED % Define the BED %.

BED Calculation Formula Define the BED calculation formula as thesum of BCD Amount, CIF Amount.

AED(GSI) Calculation Type Choose the AED(GSI) Calculation Typefrom drop down button.

AED(GSI) % Define the AED(GSI) %.

AED(GSI) calculation formula Define the AED(GSI) calculation formulaas the sum of BCD Amount, CIF Amount.

SED Calculation type Choose the SED Calculation type fromdrop down button.

SED % Define the SED %

SED Calculation formula Define the SED calculation formula as thesum of BCD Amount, CIF Amount.

SAED calculation Type Choose the SAED Calculation type fromdrop down button.

SAED % Define the SAED %.

SAED calculation formula Define the SAED calculation formula asthe sum of BCD Amount, CIF Amount.

eCess calculation type Choose the eCess Calculation type fromdrop down button.

eCess % Define the eCess %.

eCess calculation formula Define the eCess calculation formula asthe sum of BED Amount, AED Amount,SED Amount and SAED Amount.

Setoff Available for eCess Place a check mark If you want to setoff against excise payable eCess and SHECESS.

SHE CESS calculation type Choose the SHE CESS Calculation typefrom drop down button.

SHE CESS % Define the SHE CESS %

SHE CESS calculation formula Define the SHE CESS calculation formulaas the sum of BED Amount, AED Amount,

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SED Amount and SAED Amount

Custom eCess calculation type Choose the custom eCess calculation typefrom drop down button (This is a new field,which has been added to calculate theCustom eCess).

Custom eCess % Define the custom eCess % (This is a newfield, which has been added to calculatethe Custom eCess).

Custom eCess calculation formula Define the custom eCess calculationformula as the sum of BCD Amount, CVD

Amount (BED+AED+SED+SAED), e Cess Amount and SHE Cess Amount (This is anew field, which has been added tocalculate the Custom eCess).

Custom SHE CESS calculation type Choose the custom SHE CESS calculationtype from drop down button (This is a newfield, which has been introduced tocalculate the Custom SHE CESS).

Custom SHE CESS % Define the custom SHE CESS % (This is anew field, which has been added tocalculate the Custom SHE CESS).

Custom SHE CESS calculation formula Define the custom SHE CESS calculationformula as the sum of BCD Amount, CVD

Amount (BED+AED+SED+SAED), E Cess Amount and SHE Cess Amount (This is anew field, which has been added tocalculate Custom SHE CESS).

ADC VAT calculation type Choose the ADC VAT Calculation typefrom drop down button.

ADC VAT % Define the ADC VAT.

ADC VAT calculation formula Define the ADC VAT calculation formula asthe sum of BCD Amount, CIF Amount,BED Amount, AED Amount, SED Amount,SAED Amount, e Cess Amount, SHECESS Amount, Custom E Cess Amountand Custom SHE Cess Amount.

The program will calculate CVD and ADC, based on the formula defined in the ExcisePosting setup.

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Claim Setoff

Navigation:Financial Management → General Ledger → Setup → Excise → Claim Setoff


Fields Description:

Fields Description

BED Amount Choose duties from the duty code listagainst which you want to settle the BED

Amount.

AED(TTA) Amount Choose duties from the duty code listagainst which you want to settle the AED(TTA) Amount.

AED(GSI) Amount Choose duties from the duty code listagainst which you want to settle the AED(GSI) Amount.

ADET Amount Choose duties from the duty code listagainst which you want to settle the ADET

Amount.

ADE Amount Choose duties from the duty code listagainst which you want to settle the ADE

Amount.

CESS Amount Choose duties from the duty code listagainst which you want to settle the CESS

Amount.

NCCD Amount Choose duties from the duty code listagainst which you want to settle the NCCD

Amount.

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Fields Description

SAED Amount Choose duties from the duty code listagainst which you want to settle the SAED

Amount.

SED Amount Choose duties from the duty code listagainst which you want to settle the SED

Amount.

eCESS Amount Choose duties from the duty code listagainst which you want to settle the eCess

Amount.

SHE CESS Amount Choose duties from the duty code listagainst which you want to settle the SHECESS Amount.

ADC VAT Amount Choose duties from the duty code listagainst which you want to settle the ADCVAT Amount.

Structure

Navigation:Financial Management → General Ledger → Setup → Structure → Structure

Create new structure for CVD calculation with Type “Excise”.

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Fields Description

Fields Description

CVD Place a check mark in this field to calculatethe CVD.

CVD Payable to Third Party Place a check mark in this field if the CVDand ADC amount is payable to Third Partymeans Customs House.

CVD Third party Code Select the third party code from the G/Laccount List by clicking lookup button.

Note: The program will calculate CVD only if the CVD is “True” in Structure and willupdate third party account if CVD payable to third party field is checked and CVD thirdparty code is defined in structure.

Third party feature is only applicable in case of Purchase Transactions.

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Calculation of CVD and ADC through PurchaseTransactions

Calculation of CVD in case of Normal Item through Purchase Order/Invoice

Navigation:

Purchases → Order Processing → Orders

Fields Description

Fields Description

CIF Amount You need to enter per unit amount of CIFin this field.

BCD Amount You need to enter per unit amount of BCDin this field.

To calculate CVD, fill the fields in the Purchase Order form as follows:

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On the Header:


On the Line:

Type : Item No. : 1000 Description : Bicycle Quantity: 10 Direct Unit Cost: 1000 Line Amount: 10000 CIF Amount : 1000 (per quantity)BCD Amount : 1000 (per quantity)

Calculate Structure

Press F9 to view the excise amount.

Post the Order.

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G/L Entry


Particulars Type Amount (Rs.)Purchase Dr. 10399CENVAT Cr.Receivable

Dr. 4244

Vendor Cr. 10000Custom House Cr. 4643

In this case, the program will credit the Custom House with CVD and ADC amount.



CIF + BCD Amount: 20000 CVD % (BED+AED+SED+SAED) : 16% ADC VAT %: 4% Ecess %: 2% SHE CESS %: 1% Custom E Cess % 2% Custom SHE Cess % 1%

Calculation:

20000*16%: 3200 (CVD)3200*2%: 64 (ECESS)3200*1%: 32 (SHE CESS)(10000+3200+64+32)*2%: 266 (Custom ECESS)(10000+3200+64+32)*1%: 133 (Custom SHE CESS) 20000+3296+399 = 23694*4%: 948 (ADC VAT)

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Total CVD & ADC Amount: 3200+ 64+ 32+ 266+133+948 = 4643

Note: The program will load the custom eCess amount and custom SHE Cess amountto Purchase account and on inventory.

Both the custom eCess and custom SHE Cess are not available in the excise entry aswell as in RG registers; as both has to be loaded on inventory.

Excise Entry

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The program will create Excise Entry with value in the CVD field as “Yes” and will alsoupdate the ADC VAT Amount.

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RG 23 A Part I

The program will create RG 23 A Part I entry with Received Quantity.

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RG 23 A Part II

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Note 1: The user can also calculate CVD for type G/L account and Charge (Item) fromthe Purchase Order / Invoice.

Note 2: If CVD is “True” in Structure then the user should enter the amount in the CIFand BCD Amount fields on Purchase line of Order /Invoice.

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Note 3: ADC VAT amount will not be available for taking excise credit while makingpayment of service tax.

Note 4: Custom ECESS amount and Custom SHE CESS amount will be loaded oninventory and will not be available for CENVAT Credit.

Calculation of CVD in case of Capital Item through Purchase Order/Invoice


To calculate CVD, fill the fields in the Purchase Order as follows:

On the Header:


On the Line:

Type : Item No. : 1001 (Capital Item field is true in Item Card)

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Description : Touring Bicycle Quantity: 10 Direct Unit Cost: 1000 Line Amount: 10000 CIF Amount : 1000 (per quantity)BCD Amount : 1000 (per quantity)

Calculate Structure.Press F9 to view the excise amount.

Post the Order.



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G/L Entry


Particulars Type Amount(Rs)Purchase Dr. 10399CENVAT Cr.Receivable

Dr. 2596

CENVATDeferred

Dr. 1648

Vendor Cr. 10000Custom House Cr. 4643

Note: In case of capital item the program will not consider ADC VAT amount asdeferred. ADC VAT amount will be treated as CENVAT Cr. Receivable.



CIF + BCD Amount: 20000 CVD % (BED+AED+SED+SAED) : 16% ADC VAT %: 4% Ecess %: 2% SHE CESS %: 1% Custom Ecess %: 2% Custom SHE CESS %: 1%

Calculation:

20000*16%: 3200 (CVD)3200*2%: 64 (ECESS)

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3200*1%: 32 (SHE CESS)(10000+3200+64+32)*2%: 266 (Custom ECESS) (10000+3200+64+32)*1%: 133 (Custom SHE CESS)

20000+3296+399 = 23694*4%: 948 (ADC VAT) Total CVD & ADC Amount: 3200+ 64+ 32+ 266+133+948= 4643

4643-(948+266+133) =3296, 3296/2= 1648

The above calculation shows “1648” as CENVAT Deferred and “2596” as CENVATReceivable.

Note: The program will load the custom eCess amount and custom SHE Cess amountto Purchase account and on inventory.

Both the custom eCess and custom SHE Cess are not available in the excise entry aswell as in RG registers; as both has to be loaded on inventory.

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Excise Entries

First Entry

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The program will create the excise entry with ADC VAT amount while taking the value inthe CVD field as “Yes” and in the Deferred field as: “No”.

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Second Entry

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In the second entry you see that the Deferred field and the CVD field have the values as:“Yes” but there is no ADC VAT amount because ADC VAT amount is not considered as

deferred.

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RG 23 C Part I

The program will create RG 23 C Part I entry with the Received Quantity.

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RG 23 C Part II

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The program will create RG 23 C Part II entry with the value in the CVD field as: “Yes”and will update the ADC VAT Amount fields.


Note 1: The user can also calculate the CVD for type: Fixed Asset, G/L account, andCharge (Item) from the Purchase Order / Invoice.

Note 2: If CVD is “True” in Structure then the user should enter the amounts in the CIFand BCD Amount fields on the purchase line of Order/Invoice.

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Note 3: Custom ECESS amount and Custom SHE CESS amount will be loaded oninventory and will not be available for CENVAT Credit.

Calculation of CVD through Purchase Credit Memo

Navigation: Purchases → Order Processing → Credit Memo

Fields Description

Fields Description



To calculate CVD, fill the fields in the Purchase Credit Memo window as follows:

On the Header:


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On the Line:

Type : Item No. : 1000 Description : Bicycle Quantity: 10 Direct Unit Cost: 1000 Line Amount: 10000 CIF Amount : 1000 (per quantity)BCD Amount : 1000 (per quantity)

Calculate Structure

Press F9 to view the excise amount.


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Navigation:Purchases → History → Posted Credit Memos

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G/L Entry


Particulars Type Amount(Rs)Custom House Dr 4643Vendor Dr 10000CENVAT Cr.Receivable

Cr 4244

Purchase Cr 10399

In this case, the program will reverse the original transaction that has been created after posting the Purchase Order / Invoice.




Calculation:

20000*16%: 3200 (CVD)3200*2%: 64 (ECESS)3200*1%: 32 (SHE CESS)(10000+3200+64+32)*2%: 266 (Custom ECESS)

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(10000+3200+64+32)*1%: 133 (Custom SHE CESS) 20000+3296+399 = 23694*4%: 948 (ADC VAT) Total CVD & ADC Amount: 3200+ 64+ 32+ 266+133+948= 4643

Excise Entry

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The program will create Excise Entry with the value in the CVD field as “Yes” and willupdate the ADC VAT Amount.

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RG 23 A Part I

The program will create RG 23 A Part I entry with negative value in the QuantityReceived field.

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RG 23 A Part II

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The program will create RG 23 A Part II entry with the value in the CVD field as “Yes”and will update the ADC VAT Debit field also.

You can also post the transaction from the Purchase Return Order. The program willonly create RG 23 A/C part I & II entries if the user has Return Order granule.

Note 1: The user can also calculate CVD for type: Fixed Asset, G/L account and Charge(Item) from the Purchase Credit Memo/Return Order.

Note 2: If the CVD is “True” in Structure then the user should enter the amount in theCIF and BCD Amount fields on the purchase line of Credit Memo/Return Order.

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Calculation of CVD through Sales Order


Fields Description

Fields Description


BCD AmountYou need to enter per unit amount of BCDin this field.

To calculate CVD, fill the fields in the Sales Order window as follows:

On the Header:


On the Line:

Type : Item

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No. : 1000 Description : Bicycle Quantity: 10 Unit Price: 1000 Line Amount: 10000 CIF Amount : 1000 (per quantity)BCD Amount : 1000 (per quantity)

Calculate Structure





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G/L Entry



The program will create the Credit Excise Payable entry with CVD and ADC VATamount.




Calculation:

20000*16%: 3200 (CVD)3200*2%: 64 (ECESS)3200*1%: 32 (SHE CESS)(10000+3200+64+32)*2%: 266 (Custom ECESS) (10000+3200+64+32)*1%: 133 (Custom SHE CESS)

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20000+3296+399 = 23694*4%: 948 (ADC VAT) Total CVD & ADC Amount: 3200+ 64+ 32+ 266+133+948= 4643

Note: The program will only use the values of Custom eCess and Custom SHE Cess tocalculate ADC VAT Amount. There will be no financial impact of Custom eCess andCustom She Cess in case of sales transaction.

Excise Entry

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The program will create Excise Entry with value in the CVD field as “Yes” and will alsoupdate the ADC VAT Amount field.

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RG 23 A Part I


In case of sales, the user can also enter the CVD (duties) and ADC VAT amountmanually in all duties fields on the sales line only after calculating Structure.

Note 1: The user can calculate CVD by selecting Type: Fixed Asset, G/L account, andCharge (item) in the Sales Order/Invoice.

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Note 2: : If the CVD field is “True” in Structure then the user should enter the amount inthe CIF and BCD Amount fields on the sales line of Order/Invoice.

Note 3: The user can also calculate CVD through the Sales Credit Memo and ReturnOrder. In this case the program will update RG 23 A/C Part I & II entries with the value inthe CVD field as “Yes”.

Note 4: There will not be any financial impact of Custom eCess & Custom SHE Cess onsales transaction. The program will use the values of Custom eCess and Custom SHECess for calculating the ADC VAT amount.

Calculation of CVD through Transfer Order

Transfer of Normal Items

First purchase normal Items and calculate CVD and ADC VAT through the PurchaseOrder/Invoice. Then transfer of normal items from one location to another location.


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Fields Description

Fields Description




On the Header:

No : 1001Transfer from Code : Blue Transfer to Code : Green

In-transit Code : Out. Log Structure: CVD On the Line:

Item No .: 1000 Description : Bicycle Quantity: 10 Transfer Price: 1000 Amount: 10000 CIF Amount : 1000 (per quantity)BCD Amount : 1000 (per quantity)

Calculate Structure.


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G/L Entry

The program will credit the Excise Payable with CVD and ADC VAT amount, as goodshas been transferred to new location.



CIF + BCD Amount: 20000 CVD % (BED+AED+SED+SAED) : 16% ADC VAT %: 4% Ecess %: 2%

SHE CESS %: 1% Custom Ecess %: 2% Custom SHE CESS %: 1%

Calculation:

20000*16%: 3200 (CVD)3200*2%: 64 (ECESS)3200*1%: 32 (SHE CESS)(10000+3200+64+32)*2%: 266 (Custom ECESS)(10000+3200+64+32)*1%: 133 (Custom SHE CESS)

20000+3296+399 = 23694*4%: 948 (ADC VAT)Total CVD & ADC Amount: 3200+ 64+ 32+ 266+133+948= 4643

Note : The program will only use the values of Custom eCess and Custom SHE Cess tocalculate the ADC VAT Amount. There will not be any financial impact of Custom eCessand Custom She Cess in case of transfer shipments.

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Excise Entry

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The program will create Excise Entry with the value in the CVD field as “Yes” and willupdate the ADC VAT Amount field with the negative value.

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RG 23 A Part I


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G/L Entry

The program will debit CENVAT Cr. Receivable account with CVD and ADC VATamount.




Calculation:


(10000+3200+64+32)*1%: 133 (Custom SHE CESS)20000+3296+399 = 23694*4%: 948 (ADC VAT)Total CVD & ADC Amount: 3200+ 64+ 32+ 266+133+948= 4643

Note: The program will only use the values of Custom eCess and Custom SHE Cess tocalculate the ADC VAT Amount. There will not be any financial impact of Custom eCessand Custom SHE Cess in case of transfer receipts.

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Excise Entry

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The program will create Excise Entry with the value in the CVD field as “Yes” and willupdate the ADC VAT Amount field also.

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RG 23 A Part I

The program will create RG 23 A Part I entry with the value in the Quantity Receivedfield.

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RG 23 A Part II

The program will create RG 23 A Part II entry with the value in the CVD field as “Yes”and will update the ADC VAT Amount fields.

Transfer of Capital Items

First purchase the capital items and calculate CVD and ADC VAT through the PurchaseOrder/Invoice. Then transfer of the capital items from one location to another location .


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On the Header:

No : 1030 Transfer from code : Loc 1Transfer to Code : Loc 2 In-transit Code : Out. Log Structure: CVD

On the Line:

Item No .: 1001 Description : Touring Bicycle Claim Deferred Excise : True Quantity: 10 Transfer Price: 1000 Amount: 10000 CIF Amount : 1000 (per quantity)BCD Amount : 1000 (per quantity)

Calculate Structure.

Post the Transfer Order as Ship and Receive .

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G/L Entry

First the program will transfer the amount from the Deferred account to the CENVAT Cr.Receivable account and then credit the Excise Payable account.

Calculation:

• In the original entry the program has debited the CENVAT Cr. Receivable A/Cwith 2596 and CENVAT Deferred A/C with 1648 as you have purchased a capitalitem.

• The program has credited the CENVAT Deferred A/C with 1648 and debited theCENVAT Cr. Receivable A/C with 1648; after transferring capital item from Loc 1

to Loc 2.

• Now, in the CENVAT Cr. Receivable A/C; Loc 1 has a debit balance of 4244 andthe program has credited the Excise Payable A/C with 4244 after transferringcapital items to Loc 2.

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Excise Entry

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RG 23 C Part I

The program will create RG 23 C part I entry with the value in the Quantity Sold field.

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RG 23 C Part II

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The program will create RG 23 C Part II entry and transfer the duties amount from nextyear to current year.

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G/L Entry

Note: The program will debit the CENVAT Cr. Receivable and CENVAT Deferredaccount . In case of capital item, the program will not consider ADC VAT amount asDeferred. ADC VAT amount will be treated as CENVAT Cr. Receivable.



CIF + BCD Amount: 20000 CVD % (BED+AED+SED+SAED) : 16%

ADC VAT %: 4% Ecess %: 2% SHE CESS %: 1% Custom Ecess %: 2% Custom SHE CESS %: 1%

Calculation:

20000*16%: 3200 (CVD)3200*2%: 64 (ECESS)3200*1%: 32 (SHE CESS)

(10000+3200+64+32)*2%: 266 (Custom ECESS)(10000+3200+64+32)*1%: 133 (Custom SHE CESS)20000+3296+399 = 23694*4%: 948 (ADC VAT)Total CVD & ADC Amount: 3200+ 64+ 32+ 266+133+948= 4643

4643-(948+266+133) = 3296, 3296/2= 1648

The above calculation shows the “1648” as CENVAT Deferred and “2596” as CENVATReceivable

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Note : The program will only use the values of Custom eCess and Custom SHE Cess tocalculate the ADC VAT Amount. There will not be any financial impact of Custom eCessand Custom She Cess in case of transfer receipts.

Excise Entry

First Entry

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The program will create the excise entry with ADC VAT amount while taking the value inthe CVD field as “Yes” and in the Deferred field as “No”.

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Second Entry

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In the second entry the value in both of the Deferred and CVD field is “Yes” but there isno ADC VAT Amount, because ADC VAT amount should not be consider as deferred.

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RG 23 C Part I

The program will create RG 23 C Part I entry with Quantity Received.

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RG 23 C Part II

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The program will create RG 23 C Part II entry with the value in the CVD field as “Yes”and will also update the ADC VAT Amount fields.

Note 1: If the CVD is “True” in Structure then user should enter the amounts in CIF andBCD Amount fields on the Transfer Order line.

Note 2: All transactions posted from Sales, Purchase and Transfer Order documentscan be viewed in RG 23 A/C Part I & II reports.

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Excise CENVAT Claim

In case of making adjustment of excise payable amount with CENVAT credit availablefor the particular ECC number.

Navigation: Financial Management → General Ledger → General journal

On the Functions menu button, select the Payment option, and then click Excise.

A new window opens as:

In the Pay Excise window, the program will show the pending transactions of saleswhich have to be paid.


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In this form all field except Service Tax are non-editable

Click the Detail menu button to enter the values.


The program will show you the total liability according to the duty on each tab. Theprogram will also show you the credit available for each component on the top line.

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In the above form, you can see that for each duty the program is displaying liability andremaining liability. When you settle amount of duty with credit available then theremaining liability will be reduced to zero.

In the above form; you see that three tabs are available for RG 23 A Part II, RG 23 CPart II, and PLA.

You can settle your components according to the setup.


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The program will automatically fill in the fields according to the values entered in theprevious form.

Close the form.

Now the program populates the Amount field with the total value that has been adjustedagainst CENVAT Credit.

Post the Journal.

Note: As discussed above, the user can take the credit while using Direct Debit toPLA/RG during creating the Sales Order / Invoice. In this case RG 23 A Part II, RG 23 C

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Part II, and PLA tabs are editable. In case of CVD, the user can adjust ADC VAT withany component of RG 23 A Part II / RG 23 C Part II / PLA, based on the setup created inthe Claim Setoff list.

Calculation of CVD and ADC in case of Trading Items

Calculation of CVD in case of Trading Item through Purchase Order


To calculate CVD, fill the fields in the Purchase Order window as follows:

On the Header:

Buy from Vendor No : 10000 Location: Blue (Place a check mark in Trading Location Field in the

Location Card). Structure: CVD Trading : True

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G/L Entry


Particulars Type Amount(Rs)Purchase Dr 10399CENVAT cr.Receivable(Trading)

Dr 4244

Vendor Cr 10000Custom house Cr 4643

In this case the program will credit the Custom House with CVD and ADC Amount.

Calculation of CVD and ADC-



Calculation:


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(10000+3200+64+32)*1%: 133 (Custom SHE CESS)

20000+3296+399 = 23694*4%: 948 (ADC VAT)Total CVD & ADC Amount: 3200+ 64+ 32+ 266+133+948= 4643

Note: The program will load the Custom eCess amount and Custom SHE Cess amountto the Purchase account and on inventory.

Both the Custom eCess and Custom SHE Cess are not available in the Excise entry aswell as in RG 23 D entry as both has to be loaded on inventory.

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Excise Entry

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The program will create the excise entry with the value in the CVD field as “Yes” and willalso update the ADC VAT Amount field.

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RG 23 D Entry

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The program will create the RG 23 D entry with the value in the CVD field as “Yes” andwill update the ADC VAT Amount Per Unit, Line Amount Per Unit, Excise Amount Per

Unit and Excise Base Amount Per Unit fields.


Note 1: If the CVD is “True” in Structure then the user should enter the amount in CIFand BCD Amount fields on the purchase line of Order / Invoice.

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Note 2: Custom ECESS amount and Custom SHE CESS amount will be loaded oninventory.

Calculation of CVD in case of Trading Item through Sales Order


To create a sales order, fill the fields as follows:

Customer: 10000 Location: Blue Structure: Excise/CVD Item: 1000 Quantity: 10

Unit Price : 1000 Line Amount: 10000 (The program will calculate it.)


The program will calculate excise according to the defined setups.


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Navigation:Sales & Marketing → Order Processing → History → Posted Invoices

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G/L Entry


Particulars Type Amount(Rs)Customer Dr 14244CENVATTransfer trading

Cr 4244

Sales Cr 10000

Following steps are required to calculate the excise amount on FIFO (First in First Out)basis:

Step 1: Purchase has been made for 10 quantities and the CVD amount is Rs. 4244(4643 – (266+133)). Custom eCess and Custom SHE Cess has been loaded oninventory.

Step 2: While creating the Sales Order, quantity is 10

Step 3: The program will calculate the CVD amount on FIFO basis.

Step 4: From the Purchase Order, Rs. 4244 as CVD amount for 10 quantities have beentaken.

Step 5: The value will come after calculating structure values.

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Excise Entry

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The program will create the excise entry with the value in the CVD field as “Yes” and willupdate the ADC VAT Amount field with negative value.

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RG 23 D Entry

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The program will create the RG 23 D entry with negative values.

The entry will be created against Purchase Order, where quantity is 10 and CVD amountis 4244.

You can also post the transaction through the Sales Invoice

Note 1: The CVD amount will be calculated through Structures. The program willcalculate the CVD amount on pro-rata basis where the Trading Item field has a checkmark in the Sales Order form and that will be displayed in RG 23 D.

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Note 2: The CVD amount will be calculated on FIFO basis for the item, purchasedthrough Purchase Order/Invoice.

Note 3: There will not be any financial impact of the Custom e Cess and Custom SHECess on the sales transaction.

Calculation of CVD in case of Trading Item through Purchase Return Order

Navigation:Purchase → Order Processing → Return Orders


Vendor: 10000 Location: Blue (Trading location) Structure: CVD Applies-to Doc. Type: Invoice Applies-to Doc No: 108511Trading : True Item: 1000 Quantity: 10 Direct Unit Price : 1000 Line Amount: 10000 (The program will calculate it.)CIF Amount: 1000 (per quantity)BCD Amount: 1000 (per quantity)

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The program will calculate CVD according to the defined setups.




Navigation:Purchase → Order Processing → History → Posted Credit Memos

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G/L Entry


Particulars Type Amount(Rs)Customs house Dr 4643Vendor Dr 10000CENVAT Cr.Receivable(Trading)

Cr 4244

Purchase Cr 10399

Note: In this case the program will reverse the original transaction which has beencreated at the time of posting the Purchase order.




Calculation:

20000*16%: 3200 (CVD)3200*2%: 64 (ECESS)3200*1%: 32 (SHE CESS)

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(10000+3200+64+32)*2%: 266 (Custom ECESS)(10000+3200+64+32)*1%: 133 (Custom SHE CESS)20000+3296+399 = 23694*4%: 948 (ADC VAT)Total CVD & ADC Amount: 3200+ 64+ 32+ 266+133+948= 4643

Excise Entry

The program will create the excise entry with the value in the CVD field as “Yes” and willupdate the ADC VAT Amount field with negative value.

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RG 23 D Entry

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The program will create RG 23 D entry with the value in the CVD field as “Yes”.

Note 1: In case of Purchase Return Order, all values in RG 23 D table will come innegative.

Note 2: It is mandatory to enter the document number in the Applies-to Doc. No fieldwhile creating Purchase Return Order.

Note 3: If the purchase is made and the user has also sold the quantity, after that theuser is doing purchase return with the program, then the program will not allow thisprocess. There should be some minimum quantity in RG 23 D for return.

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Calculation of CVD in case of Trading Item through Sales Return Order



Customer: 10000 Location: Blue (Trading location) Structure: CVD Applies-to Doc. Type: Invoice Applies-to Doc No: 103051Trading: True Item: 1000 Quantity: 10 Direct Unit Price : 1000 Line Amount: 10000 (The program will calculate it.)


The program will calculate CVD according to the defined setup.



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Navigation:Sales & Marketing → Order Processing → History → Posted Credit Memos

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G/L Entry


Particulars Type Amount(Rs)Sales Dr 10000CENVATTransfer Trading

Dr 4244

Customer Cr 14200

The original sales invoice is posted with CVD amount as 4244. The sales invoice hasbeen applied and the program has taken the same CVD amount in the Return Order.




Calculation:


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(10000+3200+64+32)*1%: 133 (Custom SHE CESS)20000+3296+399 = 23694*4%: 948 (ADC VAT)Total CVD & ADC Amount: 3200+ 64+ 32+ 266+133+948= 4643

Note: Custom eCess and Custom SHE Cess will be used for calculating ADC VAT Amount.

Excise Entry

The program will create the excise entry with the value in the CVD field as “Yes” and willupdate the ADC VAT Amount field.

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RG 23 D Entry

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The above window shows the value in the Excise Amt Per Unit field as: 424.4.

Note 1 : In case of Sales Return Order, positive values will come in the RG 23 D table.

Note 2: It is mandatory to enter the document number in the Applies-to Doc field whilecreating the Sales Return Order.

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Normal Goods Purchased for Trading and FurtherTransferred for Manufacturing


Quantity: 10 Unit Cost: 1000 Line Amount: 10000 CIF Amount: 1000 (per quantity)BCD Amount: 1000 (per quantity)



Purchase A/C Dr. 10399CENVAT Cr. Rec. (Trading) Dr. 4244Vendor A/C Cr. 10000Customs House A/C Cr. 4643


Transfer of Goods to Manufacturing Unit from Trading Unit (through Item Re class Journal)

Navigation:Warehouse → Planning & Execution → Item Reclass. Journal

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Fill the fields as follows :

Item No.: 1000 Location: Loc 1 (Enter the trading location, from where goods

have to be transferred)New Location: Green (Enter the manufacturing location, to which

goods has to be transferred)Quantity: 10 Applies-to Entry (RG 23 D): 99


Click OK.

The selected entry number will be displayed in the Applies-to Entry (RG 23 D) field in theItem Reclass. Journal.


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G/L Entry


Purchase A/C Dr. 10000Purchase (Trading) A/C Cr. 10000

Cenvat Cr. Receivable A/C Dr. 4244Cenvat Cr. Receivable (Trading) Cr. 4244


The program will create the RG 23 D entry.

The program will reverse the original entry in RG 23 D table with negative values as theitem has been transferred to manufacturing unit with the value in the CVD field as “Yes”.

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Excise Entries

The program will also reverse the excise with negative values in trading location and inmanufacturing location. The program will create excise entry with positive values whiletaking the value in the CVD field as “Yes”.

The program will also create RG 23 A Part I & II entries in manufacturing location.

Capital Goods Purchased for Trading and furtherTransferred for Manufacturing


Item 1001 (Capital Item – Touring Bicycle)Quantity: 10 Unit Cost: 1000 Line Amount: 10000 CIF Amount: 1000 (per quantity)BCD Amount: 1000 (per quantity)Excise Amount: 4643



Purchase A/C Dr. 10399CENVAT Cr. Rec. (Trading) Dr. 4244Vendor A/C Cr. 10000Customs house A/C Cr 4643


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Transfer of Capital Goods to Manufacturing Unit from Trading Unit

Navigation:Warehouse → Planning & Execution → Item Reclass. Journal


Item No.: 1001Location: Loc 1 (Enter the trading location from where goods

have to be transferred)New Location: Green (Enter the manufacturing location to which

goods has to be transferred)Quantity: 10 Applies-to Entry (RG 23 D): 101


Click OK.

The chosen entry number will be displayed in the Applies-to Entry (RG 23 D) field in theItem Reclass. Journal.


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G/L Entry


Purchase A/C Dr. 10000Purchase (Trading) A/C Cr. 10000Cenvat Cr. Receivable A/C Dr. 2596Cenvat Cr. Deffered Account Dr. 1648Cenvat Cr. Receivable (Trading) Cr. 4244

The program will divide the CVD amount; as the Capital Item field is checked in the ItemCard.

The program will not consider ADC VAT amount in the Deferred account.The purchase and the CVD amount will be transferred to the Manufacturing G/Laccounts from the Trading G/L account.



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Excise Entries

The program will reverse the excise entry in trading location with negative values andwill also create two more entries in the manufacturing location. First entry will be createdfor non deferred with taking the value in the CVD field as “Yes” and the second entry will

be created for deferred with taking the value in the CVD as “Yes”.

The program will also create RG 23 C Part I & II entries in manufacturing location.

Note: All the transactions related to trading items, purchase, sales, and transfer of itemsfrom trading to manufacturing locations can be viewed in the RG 23 D and QuarterlyReturn for Trader’s reports.

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Transfer of Goods to Manufacturing Unit from Trading Unit through Transfer Order Form


Fill the fields as follows on the Transfer Header:

No.: 1031Transfer-From Code: Blue (Enter the trading location from where goods

have to be transferred)Transfer-to-Code: Green (Enter the manufacturing location, to which

goods has to be transferred)In-Transit Code OUT.LOG.Structure CVD

Fill the fields as follows on the Transfer Line:

Item No.: 1000 Description Bicycle Quantity: 10 Transfer Price: 1000 Amount: 10000 CIF Amount: 1000 (per quantity)BCD Amount : 1000 (per quantity)Applies-to Entry (RG 23 D): 88

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From Applies-to Entry (RG 23 D) lookup list, choose the entry number which you want totransfer.

The selected entry number will be displayed in the Applies-to Entry (RG 23 D) field in theTransfer Order form.

Post the Transfer Order.



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G/L Entry


Finished Goods A/C Dr. 10,738.05Unrealized FX Losses Cr. 6,494.05Cenvat Transferred A/C Tr. Cr. 4,244.00

The purchase and the CVD amount will be transferred to the Manufacturing G/Laccounts from the Trading G/L account.

Excise Entries

The program will create the excise entry with negative values while taking the value inthe CVD field as “Yes”.

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RG 23 D Entry

The program will also create the RG 23 D entry with transaction type “Sales”, Type“Transfer” and negative values.

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G/L Entry


Unrealized FX Losses Dr. 6,494.05Cenvat Transferred A/C Dr. 4,244.00Finished Goods A/C Cr. 10,738.05

Excise Entry

The program will create the excise entry with CVD true and will also populate the ADCVAT amount.

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The program will create RG 23 A Part II entry with the value in the CVD field as “Yes”and will also update the ADC VAT Amount field.

Transfer of Capital Goods to Manufacturing Unit from Trading Unit through Transfer Order Form


Fill the fields as follows on the Transfer Header:

No.: 1032 Transfer-From Code: Blue (Enter the trading location from where goods

have to be transferred)

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Transfer-to-Code: Green (Enter the manufacturing location, to which goods has to be transferred)

In-Transit Code OUT.LOG Structure CVD

Fill the fields as follows on the Transfer Line:

Item No.: 1001 Description Touring Bicycle Quantity: 10 Transfer Price: 1000 Amount: 10000 CIF Amount: 1000 (per quantity)BCD Amount: 1000 (per quantity) Applies-to Entry (RG 23 D): 110


The chosen entry number will be displayed in the Applies-to Entry (RG 23 D) field in theTransfer Order form.

Post the Transfer Order.

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G/L Entry


Finished Goods A/C Dr. 10,738.05Unrealized FX Losses Cr. 6,494.05Cenvat Transferred A/c Tr. Cr. 4,244.00



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Excise Entries

The program will generate the excise entry in trading location with negative values andCVD field as “Yes”.

RG 23 D Entry


Note: All the transactions related to trading items, purchase, sales, and transfer of itemsfrom trading locations to manufacturing locations; can be viewed in the RG 23 D andQuarterly Return for Trader’s reports.

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Navigation:

Warehouse→

History→

Posted Transfer Receipts

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G/L Entry


Cenvat Cr. Deffered Account Dr. 1,648.00Unrealized FX Losses Dr. 6,494.05Cenvat Cr. Receivable Account Dr. 2,596.00Finished Goods A/C Cr. 10,738.05

Excise Entry

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RG 23C Part I

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RG 23C Part II

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Note: The user can also transfer the goods from trading to trading location.

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Appendix

Illustration:

Import of goods

• CIF: 10000 • BCD: 10000 • BED: 10% • AED: 2% • SED: 2% • SAED: 2% • ECESS: 2% • SHE CESS: 1% • Custom ECESS: 2% • Custom SHE CESS: 1% •

ADC VAT: 4%

Calculation:

CIF + BCD = 20000

20000*16%: 3200 (CVD)3200*2%: 64 (ECESS)3200*1%: 32 (SHE CESS)(10000+3200+64+32)*2%: 266 (Custom ECESS)(10000+3200+64+32)*1%: 133 (Custom SHE CESS)

20000+3296+399 = 23694*4%: 948 (ADC VAT)

Total CVD & ADC Amount: 3200+ 64+ 32+ 266+133+948= 4643

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Microsoft ® Business Solutions–Navision ® 4.0- Service Tax Credit

Register

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Transactions .........................................................................................................4 Purchase Transaction for Populating Service Tax Credit Availed in the ServiceTax Credit Register. ..........................................................................................4

Viewing the Posted Transaction ....................................................................5 Service Tax Credit received from Input Service Distributor for Availing Credit.. 7

Viewing the Posted Transaction ..................................................................10 Utilizing Service Tax Credit While Making Payment of Service Tax Liability...13

Viewing the Posted Transaction ..................................................................15 Utilizing Service Tax Credit while Making Payment of Excise Duty.................16

Viewing the Posted Transaction ..................................................................20 Report.................................................................................................................22

Service Tax Credit Register ............................................................................22 Appendix.............................................................................................................28

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The Service Tax Credit Register functionality enables the manufacturer of taxable goodsor service provider to know – the amount of service tax credit that has been availed andutilized for payment of excise duty and service tax liability.

Detailed Setup

Service Tax Credit Register functionality contains the following detailed setup:

• Service tax• Excise


This functionality comprehensively covers the following points:

• Generation of Service Tax Credit Register based on the service tax registrationnumber.

• Generation of Service Tax Credit Register with values of service tax creditavailed.

• Generation of Service Tax Credit Register with values of service tax creditutilized towards service tax payments.

• Generation of Service Tax Credit Register with values of service tax creditutilized towards excise duty payments.

Reports Service Tax Credit Register report will get updated under this functionality.

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Transactions

Purchase Transaction for Populating Service Tax Credit Availed in the Service Tax Credit Register.


To calculate Service Tax, fill the fields in the Purchase Order form as follows:

On the Header:

Buy from Vendor No : 10000 Structure: Service Tax Payment Method Code: Cash (On the Invoicing tab)Location Code : Blue (On the Shipping tab)

On the Line:

Type : G/L Account No. : 8410 Description : Advertisement Location Code : Blue Quantity: 1 Direct Unit Cost: 20000

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Line Amount: 20000

Calculate Structure

Press F9 to view the service tax amount.

Post the Order.



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G/L Entry


Particulars Type Amount (Rs.) Advertisement A/C

Dr. 20000

Service TaxReceivableInterim A/C

Dr. 2472

Vendor A/C Cr. 22472Vendor A/C Dr. 22472

Service TaxRecoverable A/C Dr. 2472


Cr. 2472

Cash A/C Cr 22472

The program will also create service tax entry and service tax entry detail

Service Tax Entry

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Note 1: The program will populate values in the Credit Availed section in the ServiceTax Credit Register from the Service Tax Entry Detail.

Note 2: The program will not populate any data in the Credit Availed section if thepurchase transaction has been posted for Input Service Distribution location.

Note 3: The program will populate values in the Service Tax Credit Register for transactions, related to Service Tax on Advance Payment to Vendors, Service TaxCalculation on G/L to G/L or G/L to Bank in case Service Tax type is “Purchase”. Theprogram will also populate values in the Service Tax Credit Register for all other types of transactions related to vendors, through which service tax can be calculated and servicetax entry detail can be created.

Service Tax Credit received from Input Service Distributor for Availing Credit.

Navigation:Financial Management → General Ledger → Periodic Activity → Service Tax → Service Tax Distribution

In case some services are purchased in Green location and amount of service tax has tobe distributed in Blue location @ 100%.

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No. : ISD1009 (Press F3, and number will appear automatically)From Location : Green Service Tax Group Code : Adv Distribution Basis : Previous Year’s Profit Posting Date : 22/08/07

Click the Function menu button and choose the Apply Entries menu item to select theservice tax entry on the basis of From Location and Service Tax Group Code.


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Note: You can select multiple service tax entries for distribution.

After selecting service tax entries, the program will show the service tax amount whichhas to be distributed in the Applied Amount field on the footer level of the Service taxDistribution form.

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To Location : Blue Distribution % : 100 Distribution Amount : 1236.00

On the footer level of the Service Tax Distribution form, the program will show the following information:

Total Distribution %: 100.00 Total Distribution Amount : 1236.00 Total Applied Amount: 1236.00



Navigation:Financial Management → General Ledger → History → Service Tax → PostedService Tax Distribution.

Click Navigate to view the G/L entries.

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The program will create G/L Entries, Service Tax Entry in receiving locations andService Tax Distribution entries.

G/L Entry

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Particulars Type Amount(Rs)Service Tax Recoverable A/C –Blue Location

DR 1236.00

Service Tax Receivable(Distribution) A/C – GreenLocation

CR 1236.00

The program will transfer the distributed service tax amount from the Service TaxReceivable (Distribution) A/C to Service Tax Recoverable A/C and will store the locationcode in G/L entries.

The program will also create service tax entry and service tax entry detail in the BlueLocation.

Service Tax Entry


Note: The program will populate values in the Credit Availed section in the Service TaxCredit Register from Service Tax Entry Detail.

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Utilizing Service Tax Credit While Making Payment of Service Tax Liability

Navigation:Financial Management → General Ledger → Periodic Activities → Service Tax → Payment.

Enter the following information on the Header level of Service Tax Payment form.

Service Tax Registration No .: BJX118910100578 Date Filter : 22-08-2007 Document No .: PAYST01 Posting Date : 22-08-2007

Click the Apply Entries menu button.

The Pay Service Tax form opens.

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The program populates the values in the following fields as:

Service Tax Group Code : ADV Description : Advertisement Payment Liability : 1200.00 Payment Liability (eCess) : 24.00 Payment Liability (She Cess) : 12.00 Credit Available : 3600.00 Credit Available (eCess) : 72.00 Credit Available (She Cess) : 36.00

Enter the values in the following fields:

Credit Availed : 1200.00 Credit Availed (eCess) : 24.00 Credit Availed (She Cess) : 12.00

Post the Pay Service Tax form.

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G/L Entry

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The program creates the following G/L entry:Particulars Type Amount(Rs)Service Tax Payable A/C DR 1236.00Service Tax Recoverable A/C CR 1236.00

Note 1: The program will populate values in Credit Utilized towards Service TaxPayment section in Service Tax Credit Register.

Note 2: The program will show the utilized service tax amount, service tax eCessamount and service tax SHE Cess amount for the particular document number and date.

Utilizing Service Tax Credit while Making Payment of Excise Duty

Navigation:Financial Management → General Ledger → Periodic Activities → Service Tax → Service Tax as Excise Credit.

Select the service tax registration number and location E.C.C. number for which youwant to avail the service tax credit.

Click OK.

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The Avail Service Tax Credit form opens. In this form you can select the service taxentry which you want to adjust in excise duty liability.

Click OK.

Payment of Excise Duty


Enter the following Information on the General Journal line to pay excise duty.

Posting Date : 22-08-07 Document Type : Payment Document No.: G00076 Account Type: G/L Account Account No.: 2994 Description : Excise Payable Account Service Tax Registration No. : BJX118910100578 E.C.C. No.: BXBVS7543890

On the Functions menu button, select the Payments menu item, and then click Excise.

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The Pay Excise window opens.


The program opens the Excise CENVAT Claim form. In this form values will bepopulated under the Excise Payable and Service Tax headings as:

Excise Payable

BED Amount : 400.00 eCESS Amount : 8.00 SHE CESS Amount : 4.00

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Service Tax

Service Tax as Excise Credit : 1200.00 eCess on Service Tax as Excise Credit : 24.00 SHE Cess on Service Tax as Excise Credit : 12.00

Enter the values of service tax credit which has to be utilized for Excise Payable:

BED Amount : 400.00 eCess Amount : 8.00 SHE Cess Amount : 4.00

Close the form.

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The program will populate the value in Amount field of the General Journal.




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G/L Entry

The program creates the following G/L entry:Particulars Type Amount(Rs)Excise Payable A/C DR 412.00Service Tax Recoverable A/C CR 412.00

Note 1: The program will populate values in the Credit Utilized towards Excise DutyPayment section in the Service Tax Credit Register.

Note 2: The program will show the utilized service tax amount, service tax eCessamount, and service tax SHE Cess amount for the particular ECC number, document

number and date.Note 3: You can utilize the credits of Service Tax while using Direct Debit to PLA/RGfunctionality through Sales Order/Invoice.

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Report

Service Tax Credit Register

Navigation:Financial Management → General Ledger → Reports → Service Tax Reporting→ Service Tax Credit Register

On the Options tab

Fields DescriptionStart Date Enter the start date you want to include in

the report.

End Date Enter the end date you want to include inthe report.

ST Registration No. Choose the service tax registration number you want to include in the report.

Print Details Place a check mark in this field if you wantto print the details of service tax creditavailed, service tax credit utilized for service tax payments and service tax creditutilized for excise duty payments.

If this field is unchecked, then the reportwill only show the summary of the servicetax credit availed, service tax credit utilized

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Fields Descriptionfor service tax payments and service taxcredit utilized for excise duty payments.


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Fields description of header level of the report:

Fields DescriptionName and Address of the assessee This field gets value from the Company

Information master.

PAN No. This field gets value from the CompanyInformation master.

STC No. This field populates the same number which has been chosen in the STRegistration No. field in the ReportRequest form while generating the report.

Fields Description of “Details of Service Tax Credit” section in the report:

Fields DescriptionOpening Balance This field shows the opening balances of

service tax, service tax eCess, and servicetax SHE Cess.

Credit Availed This field shows the summary of creditavailed for service tax, service tax eCess,and service tax SHE Cess.

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Fields DescriptionTotal This field shows the sum of values in the

Opening Balance field and Credit Availedfield for service tax, service tax eCess, andservice tax SHE Cess.

Credit Utilized towards Service TaxPayment

This field shows the summary of credit of service tax, service tax eCess and servicetax SHE Cess that has been utilizedtowards service tax payment.

Credit Utilized towards Excise DutyPayment

This field shows the summary of credit of service tax, service tax eCess and servicetax SHE Cess has been utilized towardsexcise duty payment.

Total This field shows the sum of credit utilizedtowards Service Tax Payment field andcredit utilized towards Excise DutyPayment field for service tax, service taxeCess and service tax SHE Cess.

Closing Balance Closing balance of service tax, service taxeCess and service tax SHE Cess after subtracting the total (Credit Utilizedtowards Service Tax Payment and CreditUtilized towards Excise Duty Payment)from total (Opening Balance and Credit

Availed).

Fields description of “Credit Availed during the period” section in the report:

Fields DescriptionSr.No. The program generates the serial numbers

that are sequential numbers incrementedby 1.

Date This field shows the date on which servicetax credit has been availed.

Invoice/Challan This field shows the invoice/challannumber of vendor or input servicedistributor.

Document No. This field shows the document number of service tax entry detail.

Name of Input Service Distributor This field shows the name of the inputservice distributor from which credit has

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Fields Descriptionbeen received.

Name of Vendor This field shows the name of the vendor from which services has been purchased.

ST Regt. No. This field shows the service tax registrationnumber of the vendor or Input servicedistributor.

Address This field shows the address of the vendor or input service distributor.

Description of Services This field shows the description of services

Amount Paid This field shows the total amount paidincluding service tax, service tax eCessand service tax eCess to Vendor.

In case service tax credit is received frominput service distributor, this field will show“N.A.”.

Service Tax Credit Taken/Received This field shows the amount of service taxcredit.

Service Tax eCess Credit Taken/Received This field shows the amount of service taxeCess credit.

Service Tax She Cess CreditTaken/Received

This field shows the amount of service taxSHE Cess credit.

Fields description of “Credit Utilized towards Service Tax Payments” section inthe report:



Date This field shows the date on which servicetax credit has been utilized for service taxpayment.

Document No. This field shows the document number of the transaction through which service taxcredit has been utilized for service taxpayment.

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Fields DescriptionService Tax Amount This field shows the utilized amount of

service tax.

Service Tax Amount (eCess) This field shows the utilized amount of service tax eCess.

Service Tax Amount (She Cess) This field shows the utilized amount of service tax SHE Cess.

Fields description of “Credit Utilized towards Excise Duty Payments” section inthe report:



Date This field shows the date on which servicetax credit has been utilized for excise dutypayment.

Document No. This field shows the document number of the transaction through which service taxcredit has been utilized for excise dutypayment.

ECC No. This field shows the ECC number for whichservice tax credit has been utilized whilemaking payment of excise duty.

Service Tax Amount This field shows the utilized amount of service tax.

Service Tax Amount (eCess) This field shows the utilized amount of service tax eCess.

Service Tax Amount (She Cess) This field shows the utilized amount of service tax SHE Cess.

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Appendix

Case: Take an example to understand the Service Tax Credit functionality.

XYZ Ltd. provides services of Rs.100, 000 to B Ltd.

Service tax is payable @ 12.36% means, service tax of Rs.12000, education cess of Rs.240 and SHE cess of Rs.120 thereon.

Total service tax liability = 12000+240+120 = Rs. 12360

XYZ Ltd. received input services of Rs.80000 from A Ltd.

Service tax is charged @ 12.36% means, service tax of Rs.9600, education cess of Rs.192 and SHE cess of Rs.96 thereon.

Total service tax = 9600+192+96 = Rs. 9888

XYZ Ltd. receives input tax credit from input service distributor amounting to Rs.3500.

XYZ Ltd. also receives excise credit from its location amounting to Rs.4000.

Total Input Tax Credit available to XYZ Ltd. which can be utilized to setoff theservice tax liability = 9888 + 3500 + 4000 = Rs.17388

Input tax credit utilized = 17388 – 12360 = Rs.5028

Excess input tax credit of Rs.5028 can be carried forward.

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Microsoft ® Business Solutions–Navision ® 4.0- Multi location No. Series

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Setups Required ...................................................................................................4 Location Card....................................................................................................4 Purchases & Payables Setup............................................................................8 Sales & Receivables Setup ...............................................................................9

Transactions .......................................................................................................10 Purchase Order/Invoice...................................................................................10

Viewing the Posted Transaction ..................................................................11 Purchase Return Order/Credit Memo..............................................................16

Viewing the Posted Transaction ..................................................................18 Sales Order/Invoice.........................................................................................23

Viewing the Posted Transaction ..................................................................24 Sales Return Order/Credit Memo ....................................................................29

Viewing the Posted Transaction ..................................................................30 Transfer Order.................................................................................................35 Transfer Shipment...........................................................................................35

Viewing the Posted Transaction ..................................................................36 Transfer Receipt..............................................................................................39

Viewing the Posted Transaction ..................................................................40 Purchase Order/Invoice in case of Trading .....................................................43

Viewing the Posted Transaction ..................................................................44 Purchase Return Order/Credit Memo in case of Trading ................................49

Viewing the Posted Transaction ..................................................................50 Sales Order/Invoice in case of Trading ...........................................................55

Viewing the Posted Transaction ..................................................................56 Sales Return Order/Credit Memo in case of Trading.......................................61


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Multi Location No. Series functionality enables you to maintain the different number series of sales, purchase and transfer orders for different locations.

Detailed Setup

Following setups are required to enable the Multi Location No. Series functionality:

Setup Area DescriptionLocation Define the number series for Purchase Receipt,

Purchase Invoice, Sales Shipment, SalesShipment (Captive), Sales Invoice, PurchaseCredit Memo, Sales Return Receipt, Sales CreditMemo, Purchase Return Shipment, Transfer Shipment, Transfer Receipt, Purchase Invoice(Trading), Sales invoice (Trading), Return Receipt(Trading), Return Shipment (Trading), PurchaseReceipt (Trading), Sales Shipment (Trading),Purchase Credit Memo (Trading) , Sales CreditMemo (Trading) on the Numbering tab in theLocation Card. Note: Program will record the number series for posted documents on the basis of No. seriesattached in the above mentioned fields.

Purchases & Payables Setup Define the number series for Purchase Documentson the Numbering tab.

Sales & Receivables Setup Define the number series for Sales Documents onthe Numbering tab.

Inventory Setup Define the number series for Transfer Order andCaptive Consumption form on the Numbering tab.


Following comprehensive functionalities are covered under Multi Location No. Series:

• Provision to define different number series in the Location Card for different typesof sales and purchase documents.

• After posting of sales and purchase documents, the program will store thenumber series assigned in the Location Card.

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• Provision to define separate number series in sales and purchase documents incase of trading activity.

• Provision to define separate number series for the locations used in transfer orders.

Setups Required

Followings setups are required for Multi Location No. Series:

• Location Card

• Purchases & Payables Setup

• Sales & Receivables Setup

Location Card


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Numbering tab

Fields Description:

Field DescriptionPurchase Receipt Nos. Define the number series in the Purchase

Receipt Nos. field for the location to recordthe posted purchase receipt with locationspecific number series.

Earlier this field was on the TaxInformation tab.

Purchase Invoice Nos. Define the number series in the PurchaseInvoice Nos. field for the location to recordthe posted purchase invoice with locationspecific number series.


Purchase Return Shipment Nos. Define the number series in the PurchaseReturn Shipment Nos. field for the locationto record the posted purchase returnshipment with location specific number series.

Purchase Credit Memo Nos. Define the number series in the PurchaseCredit Memo Nos. field for the location torecord the posted purchase credit memowith location specific number series.

Purchase Receipt Nos. (Trading) Define the number series in the PurchaseReceipt Nos. (Trading) field for the locationto record the posted purchase receipt(Trading) with location specific number series.

Purchase Invoice No. (Trading) Define the number series in the PurchaseInvoice No. Trading field for the location torecord the posted purchase invoice(Trading) with location specific number series.

Purchase Return Shipment Nos.(Trading)

Define the number series in the ReturnShipment Nos. (Trading) field for thelocation to record the posted returnshipment (Trading) with location specificnumber series.

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Purchase Credit Memo Nos. (Trading) Define the number series in the PurchaseCredit Memo Nos. (Trading) field for thelocation to record the posted purchasecredit memo (Trading) with locationspecific number series.

Transfer Shipment Nos. Define the number series in the Transfer Shipment Nos. field for the location torecord the posted transfer shipment withlocation specific number series.

Sales Shipment Nos. (Captive) Define the number series in the SalesShpt. Nos. (Captive) field for the location torecord the posted captive consumptionshipment with location specific number series.


Transfer Receipt Nos. Define the number series in the Transfer Receipt Nos. field for the location to recordthe posted transfer receipt with locationspecific number series.

Sales Shipment Nos. Define the number series in the SalesShipment Nos. field for the location torecord the posted sales shipment withlocation specific number series.


Sales Invoice Nos. Define the number series in the SalesInvoice Nos. field for the location to recordthe posted sales invoice with locationspecific number series.


Sales Return Receipt Nos. Define the number series in the SalesReturn Receipt Nos. field for the location torecord the posted sales return receipt withlocation specific number series.

Sales Credit Memo Nos. Define the number series in the SalesCredit Memo Nos. field for the location torecord the posted sales credit memo withlocation specific number series.

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Sales Shipment Nos. (Trading) Define the number series in the Sales

Shipment Nos. (Trading) field for thelocation to record the posted salesshipment (Trading) with location specificnumber series.

Sales Invoice No. Trading Define the number series in the SalesInvoice No. Trading field for the location torecord the posted sales invoice (Trading)with location specific number series.

Sales Return Receipt Nos. (Trading) Define the number series in the SalesReturn Receipt Nos. (Trading) field for thelocation to record the posted sales returnreceipt (Trading) with location specificnumber series.

Sales Credit Memo Nos. (Trading) Define the number series in the SalesCredit Memo (Trading) field for the locationto record the posted sales credit memo(Trading) with location specific number series.

Note: After assigning number series in the Location Card, you have to assign onenumber series for the relevant document in the Purchases & Payables Setup, Sales &Receivables Setup, and Inventory Setup.

If you have not defined the number series in the Location Card then the program willtake the number series from the Purchases & Payables Setup, Sales & ReceivablesSetup, and Inventory Setup.

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Purchases & Payables Setup

Navigation:

Purchase → Setup → Purchases & Payables Setup

Numbering tab

Fields Description

Fields Description Posted Purchase Receipt Nos. (Trading) Define the number series for posted

purchase receipt (Trading).

Posted Purchase Credit Memo Nos.(Trading)

Define the number series for postedpurchase credit memo (Trading).

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Sales & Receivables Setup

Navigation:

Sales & Marketing → Setup → Sales & Receivables Setup

Numbering tab

Fields Description:

Fields DescriptionPosted Sales Shipment Nos. (Trading) Define the number series for posted sales

shipment (Trading).

Posted Sales Credit Memo Nos. (Trading) Define the number series for posted salescredit memo (Trading).

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Transactions

Purchase Order/Invoice

Navigation: Purchase → Order Processing → Orders

Fill in the following information in the Purchase Order:

On the Header

Buy-from Vendor No.: 10000 Location Code : Blue (In the Location Card mention the purchase

invoice number and purchase receipt number.)

On the Line

Type : Item No. : 1000 Location Code : Blue Quantity : 10 Direct Unit Cost Excl. VAT : 1000 Line Amount Excl. VAT : 10000

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Post the Purchase Order as Receive and Invoice


Posted Purchase Invoice

Navigation:Purchase → History → Posted Invoices

The program will post the invoice with purchase invoice number, which has beenassigned in the Blue Location Card.

Click Navigate button to view the posted transaction.

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The program will create the Posted Purchase Invoice with the number which has beenassigned in the Blue Location Card.

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G/L Entry

The program will create the G/L entry with the same document number which has beenassigned in the Location Card.

The program will also create Vendor Ledger entry with the same number which hasbeen assigned in the Location Card.

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Posted Purchase Receipt

Navigation:Purchase → History → Posted Receipts

The program will post the receipt with purchase receipt number which has beenassigned in the Blue Location Card.


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Posted Purchase Receipts

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The program will create Posted Purchase Receipts with the number, which has beenassigned in the Blue Location Card.

Notes:

1. You can post the same transaction through the Purchase Invoice.

2. If the number series is not defined in the Location Card then the program will takethe number series for posted purchase invoice and receipt from the Purchases andPayables setup.

Purchase Return Order/Credit Memo

Navigation: Purchase → Order Processing → Return Orders

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Fill in the following information in the Purchase Return Order:

On the Header

Buy-from Vendor No.: 10000 Location Code : Blue (In the Location Card, mention Purchase

Credit Memo No., and Purchase Return Shipment No.)

On the Line


Post the Purchase Return Order as Ship and Invoice

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Posted Purchase Credit Memo

Navigation:Purchase → History → Posted Credit Memo

The program will post the credit memo with purchase credit memo number which hasbeen assigned in the Blue Location Card.


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The program will create Posted Purchase Credit Memo with the number which has beenassigned in the Blue Location Card.

G/L Entry

The program will create the G/L entry with the same document number which has beenassigned in the Location Card.

The program will also create Vendor Ledger entry with the same number which hasbeen assigned in the Location Card.

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Posted Purchase Return Shipment


The program will post the return shipment with purchase return receipt number, whichhas been assigned in the Blue Location Card.

Click Navigate button to view the posted transaction

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Posted Return Shipment

The program will create Posted Return Shipment with the number which has beenassigned in the Blue Location Card.

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Notes:

1. You can post the same transaction through the Purchase Credit Memo.

2. If the number series is not defined in the Location Card then the program will takethe number series for posted purchase credit memo and return shipment from thePurchases and Payables setup.

Sales Order/Invoice

Navigation: Sales & Marketing → Order Processing → Orders

Fill in the following information in Sales Order:

On the Header

Sell-to Customer No.: 10000 Location Code : Blue (In the Location Card, mention Sales Invoice No.

and Sales Shipment No.)

On the Line

Type : Item

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No. : 1000 Location Code : Blue Quantity : 10 Direct Unit Cost Excl. VAT : 4000 Line Amount Excl. VAT : 40000

Post the Sales Order as Ship and Invoice


Posted Sales Invoice

Navigation: Sales & Marketing → History → Posted Invoices

The program will post the invoice with sales invoice number, which has been assigned inthe Blue Location Card.


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The program will create Posted Sales Invoice with the number which has been assignedin the Blue Location Card.

G/L Entry

The program will create the G/L entry with same document number, which has beenassigned in the Location Card.

The program will also create the Customer Ledger entry with the same number, whichhas been assigned in the Location Card.

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Posted Sales Shipment

Navigation: Sales & Marketing → History → Posted Shipments

The program will post the shipment with sales shipment number, which has beenassigned in the Blue Location Card.


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The program will create Posted Sales Shipment with the number, which has beenassigned in the Blue Location Card.

Notes:

1. You can post the same transaction through the Sales Invoice.

2. If the number series is not defined in the Location Card then the program will takethe number series for posted sales invoice and shipment from the Sales &Receivables setup.

Sales Return Order/Credit Memo

Navigation: Sales & Marketing → Order Processing → Return Orders

Fill in the following information in the Sales Return Order:

On the Header

Sell-to Customer No.: 10000 Location Code : Blue (In the Location Card, mention Sales Credit memo

No. and Sales Return Receipt No.)

On the Line

Type : Item

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No. : 1000 Location Code : Blue Quantity : 10 Direct Unit Cost Excl. VAT : 4000 Line Amount Excl. VAT : 40000

Post the Sales Return Order as Receive and Invoice


Posted Sales Credit Memo

Navigation: Sales & Marketing → History → Posted Credit Memo

The program will post the credit memo with sales credit memo number, which has beenassigned in the Blue Location Card.


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The program will create Posted Sales Credit Memo with the number, which has beenassigned in the Blue Location Card.

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G/L Entry

The program will create the G/L entry with same document number which has beenassigned in the Location Card.

The program will also create Customer ledger entry with the same number which hasbeen assigned in the Location Card.

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Posted Sales Return Receipt


The program will post the Return Shipment with sales return shipment number, whichhas been assigned in the Blue Location Card.


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Posted Return Receipt

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The program will create Posted Sales Return Receipt with the number which has beenassigned in the Blue Location Card.

Notes:

1. You can post the same transaction through the Sales Credit Memo.

2. If the number series is not defined in the Location Card then the program will takethe number series for posted sales credit memo and return receipt from the Sales &Receivables setup.

Transfer Order

Transfer Shipment

Navigation: Purchase → Order Processing → Transfer Orders

Fill in the following information in the Transfer Order:

On the Header

Transfer from Code: Blue (In the Location Card, mention the Transfer Shipment No.)

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Transfer to Code : Green In-Transit Code: Out. Log

On the Line

Item No : 1000 Quantity : 10 Transfer Price : 1000 Amount : 10000

Post the Transfer Order as Ship


Posted Transfer Shipment

Navigation: Warehouse → History → Posted Transfer Shipments

The program will post the transfer shipment with transfer shipment number, which hasbeen assigned in the Blue Location Card.


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Posted Transfer Shipment

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The program will create Posted transfer shipments with the number, which has beenassigned in the Blue Location Card.

G/L Entry

The program will create the G/L entry with same document number which has beenassigned in the Location Card.

The program will also create item ledger and value entries with the same number, whichhas been assigned in the Location Card.

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Transfer Receipt

Navigation: Purchase → Order Processing → Transfer Orders

Fill in the following information in Transfer Order:

On the Header

Transfer from Code: Green Transfer to Code : Blue (In the Location Card, mention the Transfer

Receipt No.)In-Transit Code: Out. Log

On the Line

Item No : 1000 Quantity : 10 Transfer Price : 1000 Amount : 10000

Post the Transfer Order as Ship and Receive

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Posted Transfer Receipt

Navigation: Warehouse → History → Posted Transfer Receipts

The program will post the transfer receipt with transfer receipt number, which has beenassigned in the Blue Location Card.


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Posted Transfer Receipt

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The program will create Posted transfer receipts with the number, which has beenassigned in the Blue Location Card.

G/L Entry


The program will also create item ledger and value entries with the same number, whichhas been assigned in the Location Card.

Notes:

1. If the number series is not defined in the Location Card then the program will takethe number series for posted transfer shipment and posted transfer receipt from theInventory Setup.

2. In case of transferring goods from trading to manufacturing location or manufacturingto trading location, the program will take the number series for posted transfer shipment and receipt from the Location Card accordingly.

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Purchase Order/Invoice in case of Trading

Navigation:

Purchase → Order Processing → Orders

Fill in the following information in the Purchase Order:

On the Header


Invoice No. Trading and Purchase Receipt No.Trading) Trading Field must be checked in Location Card.

Trading: Place a check mark in this field

On the Line


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Post the Purchase Order as Receive and Invoice



Navigation:Purchase → History → Posted Invoices

The program will post the invoice with purchase invoice number (trading), which hasbeen assigned in the Blue Location Card.


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The program will create Posted Purchase Invoices with the no. which has been assignedin the Blue Location Card.

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G/L Entry


The program will also create Vendor ledger entry with the same number, which has beenassigned in the Location Card.

RG 23 D Entry

The program will create the RG 23 D entry with same document number, which hasbeen assigned in the Location Card.

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Navigation:Purchase → History → Posted Receipts

The program will post the receipt with purchase receipt number (trading), which hasbeen assigned in the Blue Location Card.


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The program will create Posted Purchase Receipts with the number, which has beenassigned in the Blue Location Card.

Notes:

1. You can post the same transaction through the Purchase Invoice.

2. If the number series is not defined in the Location Card then the program will takethe number series for posted purchase invoice (Trading) and receipt (Trading) fromthe Purchases and Payables setup.

Purchase Return Order/Credit Memo in case of Trading

Navigation: Purchase → Order Processing → Return Orders

Fill in the following information in the Purchase Return Order:

On the Header


Credit Memo No. Trading and Purchase Returned Shipment No. Trading) Trading Field must be checked in Location Card.

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Trading: Place a check mark in this field Applies-to Document Type: Invoice Applies-to Document No.: BL-P-INV-T002

On the Line


Post the Purchase Return Order as Ship and Invoice



Navigation:Purchase → History → Posted Credit Memos

The program will post the credit memo with purchase credit memo number (trading),which has been assigned in the Blue Location Card.

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The program will create Posted Purchase Credit Memo with the number, which has beenassigned in the Blue Location Card.

G/L Entry

The program will create the G/L entry with same document number, which has beenassigned in the Location card.

The program will also create Vendor ledger entry with the same number, which has beenassigned in the Location card.

RG 23 D Entry


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Posted Purchase Return Shipment


The program will post the return shipment with purchase return shipment number (trading), which has been assigned in the Blue Location Card.


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Posted Return Shipment

The program will create Posted Return Shipment with the number, which has beenassigned in the Blue Location Card.

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Notes:

1. You can post the same transaction through the Purchase Credit Memo.

2. If the number series is not defined in the Location Card then the program will takethe number series for posted purchase credit memo (trading) and return shipment(trading) from the Purchases and Payables setup.

Sales Order/Invoice in case of Trading


Fill in the following information in the Sales Order:

On the Header

Sell-to Customer No.: 10000 Location Code : Blue (In the Location Card, mention Sales Invoice

No. trading and Sales Shipment No. trading)Trading field must be checked in Location Card

Trading: Place a check mark in this field

On the Line

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Post the Sales Order as Ship and Invoice



Navigation:

Sales & Marketing → History → Posted Invoices

The program will post the invoice with sales invoice number (trading), which has beenassigned in the Blue Location Card.


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The program will create Posted Sales Invoices with the number, which has beenassigned in the Blue Location Card.

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G/L Entry


The program will also create Customer ledger entry with the same number, which hasbeen assigned in the Location Card.

RG 23 D Entry


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Navigation: Sales & Marketing → History → Posted Shipment

The program will post the shipment with sales shipment number (trading), which hasbeen assigned in the Blue Location Card.


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The program will create Posted Sales Shipment with the number, which has beenassigned in the Blue Location Card.

Notes:

1. You can post the same transaction through the Sales Invoice.

2. If the number series is not defined in the Location Card then the program will takethe number series for posted sales invoice (trading) and shipment (trading) from theSales & Receivables setup.

Sales Return Order/Credit Memo in case of Trading

Navigation: Sales & Marketing → Order Processing → Return Orders

Fill in the following information in the Sales Return Order:

On the Header

Sell-to Customer No.: 10000 Location Code : Blue (In the Location Card, mention Sales Credit

memo No. (trading) and Sales Return Receipt No

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(trading).) Trading must me checked in Location Card.

Trading: Place a check mark in this field.Applies-to Document Type: Invoice Applies-to Document No.: BL-S-INV T007

On the Line


Post the Sales Return Order as Receive and Invoice



Navigation: Sales & Marketing → History → Posted Credit Memo

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The program will post the credit memo with sales credit memo number (trading), whichhas been assigned in the Blue Location Card.


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The program will create Posted Sales Credit Memo with the number, which has beenassigned in the Blue Location Card.

G/L Entry


The program will also create customer ledger entry with the same number, which hasbeen assigned in the Location Card.

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RG 23 D Entry




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The program will post the Return Receipt with sales return receipt number (trading),which has been assigned in the Blue Location Card.


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The program will create Posted Sales Return Receipt with the number, which has beenassigned in the Blue Location Card.

Notes:

1. You can post the same transaction through the Sales Credit Memo.

2. If the number series is not defined in the Location Card then the program will takethe number series for posted sales credit memo (trading) and return receipt (trading)from the Sales & Receivables setup.

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Microsoft ® Business Solutions–Navision ® 4.0- Stale Cheque

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Setups Required ...................................................................................................4 Bank Account Card ...........................................................................................4

Using Stale Cheque Functionality in case Bank Payment Type is “Computer Check” ..................................................................................................................5

Marking the cheque as Stale in the Check Ledger Entry form, entered throughthe Bank Payment Voucher...............................................................................5

Viewing the Posted Transaction ....................................................................7 Using Stale Cheque Functionality in case Bank Payment Type is “Manual Check”............................................................................................................................15

Marking the cheque as Stale in the Check Ledger Entry form, entered throughthe Bank Payment Voucher.............................................................................15


Using Stale Cheque Functionality in case Bank Payment Type is “Blank”..........24 Marking the cheque as Stale in the Check Ledger Entry form, entered throughthe Bank Payment Voucher.............................................................................24

Viewing the Posted Transaction ..................................................................25 Appendix.............................................................................................................31

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Overview of FunctionalityStale Cheque functionality enables you to mark the cheque as stale when the stalecheque stipulated period expires.

Every bank has its own validity period for the cheque. It can be 3 months, 6 months, andso on. If the cheque is not presented within the specified time period; then the chequebecomes stale.

Detailed Setup

Following setups are required to enable the Stale Cheque functionality:

Setup Area DescriptionBank Card Define the stale cheque stipulated period.

Location Define the voucher number series for bank paymentvoucher and the relevant bank account, if location isdefined in the batch created for bank paymentvoucher.

Company Information Define the voucher number series for bank paymentvoucher and the relevant bank account.

General Ledger Setup Place a checkmark in the Activate Cheque Number field.

General Journal Template Define general journal templates for bank paymentsand its batches.

Source Code Define the source code setup for the bank paymentvoucher.


Following comprehensive functionalities are covered under Stale Cheque:

• Provision to enter the stale cheque stipulated period in the Bank Account Card.

• Provision to mark the cheque as stale in Check Ledger Entries form in case bankpayment type is Computer Check.

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• Provision to mark the cheque as stale in Check Ledger Entries form in case bankpayment type is Manual Check.

• Provision to mark the cheque as stale in Bank Ledger Entries form in case bankpayment type is Blank.

Setups Required

Bank Account Card

Navigation:Financial Management → Cash Management → Bank Accounts

Field Description:

Field DescriptionStale Cheque Stipulated Period Enter the stale cheque stipulated period in

day/week/month/quarter/year.

Enter the following value in the Bank Account Card:

Stale Cheque Stipulated Period : 6M

Notes:

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1. The program will not accept any negative value in this field. The program will displayan error message if the user will enter the negative value.

2. Also the program will not accept any decimal value in this field.

Using Stale Cheque Functionality in case Bank Payment

Type is “Computer Check”

Marking the cheque as Stale in the Check Ledger Entry form,entered through the Bank Payment Voucher

Navigation: Financial Management → Cash Management → Bank Payment Voucher

Before marking the cheque as Stale, the check ledger entry should be posted.

Enter the following details in the Bank Payment Voucher:

Batch Name : Bank- ST Posting Date : 10-07-07 Document Type : Payment Document No. : ST-1 Account Type : Vendor Account No. : 10000 Amount : 15000 Balance Account Type : Bank Account

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Balance Account No. : WWB-OPERATING Bank Payment Type : Computer Check Cheque No. : Blank Cheque Date : 09-07-07

On the Payments menu button click the Print Check menu item.

Navigate to the Options tab.

Field Description:

Field DescriptionBank Account Choose the bank account in this field.

Last Check No. The program populates the value in thisfield.

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Click the Print button.

The program will populate the cheque number on the bank journal form.Post the transaction.


Navigation:General Ledger → History → Registers

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G/L Entry


Particulars Type Amount(Rs)Vendor A/C DR 15000Bank A/C CR 15000

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Check Ledger Entry: (Before the cheque gets staled)

The program will populate the stale cheque expiry date based on the stale chequestipulated period mentioned in the Bank Account Card.

The Stale Cheque and Cheque Stale Date field will remain unchanged.

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Bank Ledger Entry: (Before the cheque gets staled)

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Process to stale the cheque:

Navigation: Financial Management → Cash Management → Bank Card → Check Ledger Entries

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Field Description:

Field DescriptionStale Cheque A check mark in this field shows that the

user has chosen the Stale Check menuitem on the Check menu button.

Stale Cheque Expiry Date This field shows the last date of presentingthe cheque. After this date, the cheque willbe marked as stale

Cheque Stale Date This field shows the date of marking thecheque as stale.

Before marking the cheque as Stale; make sure that work date is greater than the stalecheque expiry date.

On the Check menu button, click the Stale Check menu item.

Check Ledger Entry : (After the cheque gets staled)

The program will show the value in the Entry Status field as Financially Voided. Also theprogram will populate the values in the Stale Cheque and Cheque Stale Date fields.

The program will pass a reverse transaction as:

Particulars Type Amount(Rs)Bank A/C DR 15000Vendor A/C CR 15000

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Bank Ledger Entry : (After the cheque gets staled)

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Field Description:

Field DescriptionStale Cheque This field shows the status of the cheque

as whether the cheque has been markedas stale or not.

Stale Cheque Expiry Date This field shows the last date of presentingthe cheque. After this date the cheque will

be marked as stale.

Cheque Stale Date This field shows the date of marking thecheque as stale.

The program will populate the values in the Stale Cheque and Cheque Stale Date fields.

Notes:

1. The program will not allow you to mark the cheque as Stale before its expiry date.The program will display an error message in case you mark the cheque as Stale.

2. The program will not allow you to stale the cheque; which has already been void.The program will display an error message in case you mark the cheque as Stale.

3. The program will not allow you to edit the Stale Cheque, Stale Cheque Expiry Date,Cheque Stale Date fields.

4. The program will allow you to use the Stale Cheque functionality even if ActivateCheque No. field is unchecked in the General Ledger setup.

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5. The user can also do the same transaction through the Payment Journal form.

6. Before using the Bank Payment Voucher, you need to define the voucher number series and the relevant bank account either in the Company Information Card or inthe Location Card if location is defined in the General Journal batches .

Using Stale Cheque Functionality in case Bank PaymentType is “Manual Check”





Batch Name : Bank- ST Posting Date : 10-07-07 Document Type : Payment Document No. : ST-3

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Account Type : Vendor Account No. : 10000 Amount : 20000 Balance Account Type : Bank Account Balance Account No. : WWB-OPERATING Bank Payment Type : Manual Check Cheque No. : 3240 Cheque Date : 11-07-07

Post the transaction.



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G/L Entry



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Check Ledger Entry: (Before the cheque gets staled)



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Navigation: Financial Management → Cash Management → Bank Card → Check Ledger Entries

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Before marking the cheque as Stale, make sure that work date is greater than the stalecheque expiry date.

On the Check menu button, click the Stale Check menu item.

Check Ledger Entry : (After the cheque gets staled)

The program will change the entry status as Financially Voided. The program willpopulate the Stale Cheque field and Cheque Stale Date field.

The program will pass a reverse transaction as:

Particulars Type Amount(Rs)Bank A/C DR 20000Vendor A/C CR 20000

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The program will populate the values in the Stale Cheque and Cheque Stale Date field.

Notes:

1. The program will not allow you to mark the cheque as Stale before its expiry date.The program will display an error message in case you mark the cheque as Stale.

2. The program will not allow you to stale the cheque; which has already been void.The program will display an error message in case you mark the cheque as Stale.



5. The user can also do the same transaction through the Payment Journal Form.

6. Before using the Bank Payment Voucher, you need to define the voucher number

series and the relevant bank account either in the Company Information Card or inthe Location Card if location is defined in the General Journal batches .

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Using Stale Cheque Functionality in case Bank PaymentType is “Blank”





Batch Name : Bank- ST Posting Date : 10-07-07 Document Type : Payment Document No. : ST-6 Account Type : Vendor Account No. : 10000 Amount : 25000 Balance Account Type : Bank Account Balance Account No. : WWB-OPERATING Bank Payment Type : Blank Cheque No. : 4070 Cheque Date : 09-07-07

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Post the transaction.



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G/L Entry



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Navigation: Financial Management → Cash Management → Bank Card → Ledger Entries

Before marking the cheque as Stale, make sure that work date is greater than the stalecheque expiry date.

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On the Check menu button, click the Stale Cheque menu item.


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The program will populate the values in the Stale Cheque and Cheque Stale Date fields.

Notes:1. The program will not allow you to mark the cheque as Stale before its expiry date.

The program will display an error message in case you mark the cheque as Stale.



4. The user can also do the same transaction through the Payment Journal.

5. Before using the Bank Payment Voucher, you need to define the voucher number series and the relevant bank account either in the Company Information Card or inthe Location Card if location is defined in the General Journal batches .

6. The program will not pass any reverse transaction when you stale the cheque.

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Appendix

Case:

Take the example of company XYZ Ltd. The company issues a cheque to the vendor ALtd. for Rs.11000, dated 01-11-06, drawn on ABN Amro Bank. The validity period of presenting the cheque is 6 months. A Ltd. presents the cheque on 03-05-07. The bankwill dishonor the cheque as the validity period expires on 30-04-07 and the chequebecomes a stale cheque.

Financial Impact :

In the books of XYZ Ltd.:When the cheque is issued by XYZ Ltd., it will pass the entry for the same therebyreducing its bank balance and debiting the Vendor A/C.

Debit (Rs) Credit (Rs.) A Ltd. A/C 11000Bank A/C 11000

After the cheque is dishonored, a reversal entry will pass; thereby increasing the bankbalance and the Vendor A/C will again appear in the books.

Debit (Rs) Credit (Rs)Bank A/C 11000

A Ltd. A/C 11000

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Microsoft ® Business Solutions–Navision ® 4.0- New ST3 Return for

Service Tax

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Setups Required for ST3 Return...........................................................................5 Service Tax Groups...........................................................................................5 Service Tax Setup...........................................................................................11 Service Tax Registration No. ...........................................................................12 Company Information......................................................................................13 Service Tax Return Period ..............................................................................17 Location Card..................................................................................................20 Customer Card................................................................................................21 E.C.C. Nos. .....................................................................................................23 Excise No. Series............................................................................................23 Excise Posting Setup ......................................................................................24

Excise Claim Setoff .........................................................................................24 Item Card ........................................................................................................25

Transactions .......................................................................................................26 Sales Transaction for Populating gross amount received against servicesprovided in ST-3 return....................................................................................26

Viewing the Posted Transaction ..................................................................28 Sales Transaction for populating gross amount for which bills are issuedrelating to services provided/to be provided in ST-3 return. ............................31

Viewing the Posted Transaction ..................................................................32 Service Tax on Advance Payment Transaction for populating advancereceived for service to be provided in ST-3 return...........................................34

Viewing the Posted Transaction ..................................................................35 Sales Transaction for populating amount received against export of services inST-3 return. .....................................................................................................38

Viewing the Posted Transaction ..................................................................40 Sales Transaction for populating amount received against sale of exemptedservices in ST-3 return. ...................................................................................43

Viewing the Posted Transaction ..................................................................45 Sales Transaction for populating amount received as Pure Agent in ST-3return...............................................................................................................48

Viewing the Posted Transaction ..................................................................49 Sales Transaction for populating Abatement Claimed in ST-3 return..............52

Viewing the Posted Transaction ..................................................................53 GTA transaction in case of Service Receiver ..................................................57

Viewing the Posted Transaction ..................................................................59 Purchase Transaction for populating Credit of CENVAT Taken on Inputs in ST-3 return............................................................................................................62

Viewing the Posted Transaction ..................................................................63 Purchase Transaction for populating Credit of CENVAT Taken on CapitalGoods in ST-3 return.......................................................................................66

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Viewing the Posted Transaction ..................................................................67 Purchase Transaction for populating Credit of Input Services received in ST-3return...............................................................................................................70

Viewing the Posted Transaction ..................................................................71 Credit Received from Input Service Distributor................................................74


Credit Received from inter unit transfer by a LTU. ..........................................79 Viewing the Posted Transaction ..................................................................80 Viewing the Posted Transaction ..................................................................82

Purchase Transaction for populating the amount of credit taken (for distribution) on input services..........................................................................84

Viewing the Posted Transaction ..................................................................86 Input Service Distribution Transaction for populating service tax amountdistributed in ST-3 return.................................................................................89

Viewing the Posted Transaction ..................................................................92 Purchase Transaction for populating the amount of credit taken (for

distribution) on input services..........................................................................96

Viewing the Posted Transaction ..................................................................98 Payment of GTA Service Tax Liability in Cash..............................................101

Viewing the Posted Transaction ................................................................103 Update Challan Details ..............................................................................105

Utilizing Service Tax Credit and Excise Credit While Making Payment of Service Tax Liability in Cash. ........................................................................107


Utilizing Service Tax Credit and Excise Credit While Making Payment of Arrears of Service Tax Liability in Cash with Interest and Penalty ................115


Utilizing Service Tax Credit and Excise Credit while Making Payment of ExciseDuty...............................................................................................................128

Viewing the Posted Transaction ................................................................134 ST3 Removed as such/LTU Dtl. ....................................................................137

Report...............................................................................................................140 Form ST-3 .....................................................................................................140 Filling of ST-3 ................................................................................................156 Fields Description of ST-3 report...................................................................156

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Overview of FunctionalityST-3 return for Service Tax functionality enables the assessee who is paying service taxto the Service Tax department monthly or quarterly to generate the ST-3 return with allthe relevant information. ST-3 return should be submitted within 25 days of the end of the half year. Half year stands for the period from 1 st April to 30 th September and 1 st

October to 31st

March.

Detailed Setup

ST-3 return for Service Tax functionality contains the following detailed setup:

• Service Tax• Excise

Comprehensive Functionality This functionality comprehensively covers the following points:

• Provision to define service tax group and service tax registration number asservice provider or service receiver

• Provision to enter the notification number availed against exemption• Provision to enter the notification serial number against abatement• Provision to enter the premises code and sub-clause number • Provision to choose the service tax payment period• Provision to choose the status of the company as Private Ltd., Public Ltd.,

and so on• Provision to identify the program if the LTU has opted for central service tax

registration number • Provision to define the service tax return period• Provision to generate service tax payment due date.• Provision to post the sales transaction in case export of services• Provision to post the sales transaction in case of exempted services• Provision to post the sales transaction as Pure Agent.• Provision to pay the arrears of service tax liability in cash with interest,

penalty, and so on• Provision to settle the CENVAT credit of service tax and CENVAT credit of

excise duty against arrears of service tax liability•

Provision to generate the ST-3 return on half yearly basis

Reports ST-3 return will get updated under this functionality.

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Setups Required for ST3 Return

Service Tax Groups

Navigation: Financial Management → General Ledger → Setup → Service Tax → TaxGroups

Field Description :

Field DescriptionSub-clause No. Enter the sub clause number (under clause(105) of section 65) for the Service TaxGroup code.

The value in Sub-clause No. field will bedisplayed in Sr. No. 3. B. of ST-3 return.

After entering Sub-clause No. for service tax group code, click the Functions menubutton and select the ST Group/ST Reg. Nos. menu item.

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The program will open the ST Group/ST Registration Nos. form to allow you to map the“Service Tax Registration No.” with “Liable to pay Service Tax as” for particular servicetax group code.

Fields Description:Fields DescriptionService Tax Registration No. Choose the service tax registration number

from lookup list.

Liable to pay Service Tax as Choose the option from drop down button. Available options are Service Provider andService Receiver.

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Fields Description

Service Provider: Service provider isliable to pay service tax on sale of taxableservices.

Service Receiver: Service Receiver isliable to pay service tax on purchase of taxable services. (For example: in case of GTA)

The program will place a check mark in Sr.No. 3. A2 of ST-3 return on the basis of theoption chosen in this field.

For Service Tax Group Code “ADVT.” choose the option as “Service Provider” in “Liableto pay Service Tax as” field against Service Tax Registration No. of RED Location.

To open the Service Notification Nos. form, click ST Regn. Notification.

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Fields Description:

Fields DescriptionService Tax Registration No. Choose the service tax registration number

from the lookup list.

Type Choose the option from drop down button.The available options are: Exemption and

Abatement. If the option is chosen as“Exemption” then the program will displaythe value as “Y” in Sr. No. 3. C1 of ST-3return. If the option is chosen as“Abatement” then the program will displaythe notification serial number in Sr. No. 3Dof ST-3 return.

Notification No. Enter the notification number which has tobe displayed in Sr. No. 3. C2. of ST-3return.If the Notification No. field is blank then theprogram will display the value as “N” in Sr.No. 3C1 of ST-3 return.

Notification Date Enter the date of the notification.

Notification Sr. No. Enter the notification serial number whichhas to be displayed in Sr. No. 3. D. of ST-3return. If the Type chosen as “Exemption”then the program will not populate thenotification serial number in Sr. No. 3D of ST-3 return.

For Service Tax Group Code “TRANSPORT”, click the Functions menu button andselect the ST Group/ST Reg. Nos. menu item.

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The program will open ST Group/ST Registration Nos. form to allow you to map the“Service Tax Registration No. with “Liable to pay Service Tax as” for particular servicetax group code.

For Service Tax Group Code “TRANSPORT” choose the option as “Service Receiver” in“Liable to pay Service Tax as” field against Service Tax Registration No. of REDLocation.

To enter the notification numbers directly for particular service tax group code, click theFunctions menu button and select the Notification Nos. menu item.

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Fields Description:

Fields DescriptionService Tax Registration No. Choose service tax registration number

from lookup list.

Type Choose the option from drop down button.The options available are Exemption and

Abatement. If the option is chosen as“Exemption” then the program will displaythe value as “Y” in Sr. No. 3. C1 of ST-3return And if the option is chosen as“Abatement” then the program will displaythe notification serial number in Sr. No. 3D

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of ST-3 return.

Notification No. Enter the notification number which has tobe displayed in Sr. No. 3. C2. of ST-3return.If the Notification No. field is blank then theprogram will display the value as “N” in Sr.No. 3C1 of ST-3 return.

Notification Date Enter the date of the notification.

Notification Sr. No. Enter the notification serial number whichhas to be displayed in Sr. No. 3. D. of ST-3return. If the Type chosen as “Exemption”then the program will not populate thenotification serial number in Sr. No. 3D of ST-3 return.

Service Tax Setup

Navigation: Financial Management → General Ledger → Setup → Service Tax → Tax Setup

Create the Service Tax Setup for Service Tax Group Code “ADVT.” and “TRANSPORT”.

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Service Tax Registration No.

Navigation: Financial Management → General Ledger → Setup → Service Tax → Tax

Registration Nos.

Field Description:

Field DescriptionPremises Code No. Enter the premises code number for

service tax registration number. The valuein this field will be displayed in Sr. No. 2C. of ST-3 return.

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Company Information


Place a check mark in the Large Tax Payer field and choose the large tax payer cityfrom the lookup list. The program will display the value as “Y” in Sr. No. 1A. of ST-3return on the basis of this setup and will display the city in Sr. No. 1B. of ST-3.

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Field Description:

Others tab:

Field DescriptionCompany Status Choose the company status from the drop

down button and the program will pace acheck mark in Sr. No. 2 D . of ST-3 returnon the basis of the option chosen in thefield.

Note: Following options are already exist:

• Public limited co• Private Limited co• Others• Government

Following options are added:• Individual/Proprietary• Registered trust• Partnership• Society /Co-op Society

Choose the option as “Public Limited Co.” in the Company Status field for Cronus IndiaLtd.

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Field Description:

Others tab

Field DescriptionST Payment Period Choose the ST payment period as Monthly

or Quarterly from the dropdown button. If Monthly option has been selected, then thedata of Sr. No. 3F, 4A, 5B and 6 of ST3should be grouped on monthly basis;otherwise it would be grouped on quarterlybasis.

Note: If the assessee is individual or partnership firm, then the service taxpayment is to be made with in 5 days atthe end of quarter. In other cases servicetax payment is to be made 5th of themonth following the month in whichpayments are received towards valuetaxable service except in march.

Central STC Applicable Place a check mark in this field in caseLTU has centralized registration for servicetax. If this filed is checked then values of Sr. No. 5B. (I) (b) (v) and 5B. (II) (b) (v). inST-3 will not be populated and the samevalues will be populated in Sr. No. 5B (I)(b) (i)/(ii) and 5B (II) (b) (i) / (ii) in ST-3. Note: If this field is checked then theprogram will not allow the user to enter thevalues in From ITU for LTU, From ITU for LTU (eCess) and From ITU for LTU (SHECess) fields in ST3 Removed as such/LTUDtl. Form.

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Field Description:

Others tab

Field DescriptionST Payment Due Date Enter the Payment Due Date of Service tax

payment which is normally 05 th of the nextof service tax liability.Note: Due date for making payment of service tax for the month of March is 31 st March. In this case program will

automatically generate the payment DueDate as 31 st march.

Choose the option as “Monthly” in ST Payment Period field and option as “Public LimitedCo.” in Company Status field and enter ST payment due date as “5”.

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Service Tax Return Period

Navigation:

Financial Management → General Ledger → Setup → Service Tax → ServiceTax Return period

Fields Description:

Fields Description

Year Enter the Year for which Service TaxReturn has to be submitted.

Return Period Choose the Return Period from drop downbutton. Options are Apr-Sep and Oct-Mar.

Return Filling Due Date Enter the due date of Filling of ST-3 return. Actual Return Filed Date Enter the actual date on which ST-3 return

has been filled to the Service Taxdepartment.

Note : There must be service tax return period, one year preceding to the existing servicetax return period. Also generate the payment due date for the same.

Example:On generating Service Tax return (ST-3) for the period April-Sept 2007, you should enter the service tax return period for April-Sept and Oct-March for the year 2006-07.

On the Functions menu button click the Generate Payment Due Dated menu item togenerate the payment due date of service tax.

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Service Tax Return Period

The program will generate the Service Tax period Due Dates

Fields Description:

Fields DescriptionST Payment Period The value in the field will be populated on

the basis of ST Payment Period chosen incompany information master.

Month/Qtr The value in this field will be populated onthe basis of Return Period chosen in

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Service Tax Return Period form.

Payment Due Date Due date of service tax payment will begenerated on the basis of entered value inST Payment Due Day in companyinformation master.

On the Return Period menu button click the Return Period Due Dates menu item toview/modify the generated service tax period due dates.

The program will open the Service tax Period Due Dates form.

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Location Card

Navigation:

Warehouse → Setup → Locations

Choose the Service Tax Registration No. and E.C.C. No. in the Location card of RED.

Choose the Service Tax Registration No. and E.C.C. No. in the Location card of SILVERwhich is Input Service Distributor.

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Customer Card

Navigation: Sales & Marketing → Sales → Customers

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Field Description:

Tax Information tab

Field DescriptionNature of Services Choose the nature of services as

exempted or export from drop downbutton. If option Exempted or export isselected then Service tax amountcalculated in transaction will be zero andservice tax entry will be created with zeroService tax amount and display thecharged amount of exported/exemptedservice provided/to be provided in Sr. No.3. F. (II) (l) & (m) of ST-3 return. Whenpayment has been received fromCustomer program will also create ServiceTax Entry Detail with Zero Service Taxamount and display the received amountagainst export/exempted service. In Sr.No. 3. F. (I) (a) (i) and 3. F. (I) © (i) & (ii) of ST-3 return.

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E.C.C. Nos.

Navigation: Financial Management → General Ledger → Setup → Excise → E.C.C. Nos.

Choose the Type of Unit as “Manufacturer” from drop down button for E.C.C. Nos. of RED and SILVER locations.

Excise No. Series

Navigation: Financial Management → General Ledger → Setup → Excise → Excise No.Series.

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Assign Type as “LTU RM” with BLUE location E.C.C. No. and also assign type as“RG23A Part I”, “RG23A Part II”, “RG23C Part I” and RG23C Part II” with RED LocationE.C.C. No.

Excise Posting Setup

Navigation: Financial Management → General Ledger → Setup → Excise → Posting Setup.

Create the Excise posting setup with the combination of Excise Bus. Posting Group andExcise Prod. Posting Group.

Excise Claim Setoff

Navigation: Financial Management → General Ledger → Setup → Excise → Claim Setoff.


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Item Card

Navigation:

Purchase → Planning → Items

On the Item menu button, select the ECC No. /Item Categories menu item to assignType of item with E.C.C. No.

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Assign Type of Item as “Raw Material” with BLUE location E.C.C. No.

Transactions

Sales Transaction for Populating gross amount received against services provided in ST-3 return.


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To calculate Service Tax, fill the fields in the Sales Order form as follows:

On the Header:

Sell-to Customer No : 50000 Structure: Service Tax Payment Method Code: Cash (On the Invoicing tab)Location Code : RED (On the Shipping tab)

On the Line:Type : G/L Account No. : 8470 Description : Advertising & Media A/C Location Code : RED Quantity: 1 Unit Price: 100000 Line Amount: 100000

Calculate Structure

Press F9 to view the service tax amount.

Post the Order.

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G/L Entry


Particulars Type Amount (Rs.) Advertising &Media A/C

Cr. 100000

Service TaxPayable Interim

A/C

Cr. 12360

Customer A/C Dr. 112360Cash A/C Dr. 112360

Service TaxPayable A/C Cr. 12360


A/C

Dr. 12360

Customer A/C Cr 112360

The program will also create service tax entry and service tax entry detail

Service Tax Entry

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The program will display the following values in Sr. No. 3.F. (I) (a) (i) of ST-3 return for the month of April.

Sr. No. 3 F (I) (a) (i) Amount Against Service Provided 100000

The program will display the following values in Sr. No. 3.F. (I) (f) (iv) of ST-3 return for the month of April.

Sr. No. 3 F (I) (f) (iv) AmountValue on which service tax is payable @12%

100000

The program will display the following values in Sr. No. 3.F. (I) (g) (h) (i) of ST-3 returnfor the month of April.

Sr. No. 3 F (I) (g) (h) (i) AmountService Tax payable 12000Education Cess Payable 240Secondary and higher education CessPayable

120

The program will display the following values in Sr. No. 3.F. (II) (j) of ST-3 return for themonth of April.

Sr. No. 3 F (II) (j) AmountGross amount for whichbills/invoices/challans are issued relating toservice provided/to be provided (includingexport of service and exempted service)

100000

Note1 : You can also post the same transaction through Sales Invoice.

Note 2: The program will display the values in the above Serial Numbers from ServiceTax entries and Service Tax entry details which has been created through SalesOrders/Invoices, Sales Return Order/Credit Memo, General Journal, Journal Voucher,Cash Receipt Voucher, Payment Journal, Cash Receipt Voucher, Bank Receipt Voucher and Service Tax Opening form.

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Sales Transaction for populating gross amount for which bills are issued relating to services provided/to be provided in ST-3 return.


To calculate Service Tax, fill the fields in the Sales Order form as follows:

On the Header:

Sell-to Customer No : 50000 Structure: Service Tax Location Code : RED (On the Shipping tab)

On the Line:

Type : G/L Account No. : 8470 Description : Advertising & Media A/C Location Code : RED Quantity: 1 Unit Price: 200000 Line Amount: 200000

Calculate Structure

Press F9 to view the service tax amount.Post the Order.

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G/L Entry

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Cr. 200000

Service TaxPayable Interim A/C

Cr. 24720

Customer A/C Dr. 224720

The program will also create service tax entry

Service Tax Entry



200000

Note 1 : You can also post the same transaction through Sales Invoice

Note 2: The program will display the values in the above Serial Number from ServiceTax entries which has been created through Sales Orders/Invoices, Sales ReturnOrder/Credit Memo, General Journal, Journal Voucher and Service Tax Opening form.

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Service Tax on Advance Payment Transaction for populating advance received for service to be provided in ST-3 return.

Navigation:

Financial Management → Cash Management → Bank Receipt Voucher

To calculate Service Tax, fill the fields in the Bank Receipt Voucher as follows:

First Line:

Posting Date : 30-04-07 Document Type: Payment Document No. : BR001Serv. Tax on Advance Payment: True Account Type : Customer Account No.: 30000 Description: John Haddock Insurance Co.Service Tax Group Code : ADVT.Service Tax Registration No.: RED118910100578 Credit Amount : 50000

Second Line:

Posting Date : 30-04-07 Document Type: Payment Document No. : BR001Account Type : Bank Account Account No.: GIRO Description: GIRO Bank Debit Amount: 50000

Post the Bank Receipt Voucher.

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G/L Entry

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Particulars Type Amount (Rs.)Customer A/C Cr. 50000Service Tax

Payable A/C

Cr. 5500.18


A/C

Dr. 5500.18

Bank A/C Dr. 50000

The program will also create service tax entry

Service Tax Entry


The program will display the following values in Sr. No. 3.F. (I) (a) (ii) of ST-3 return for the month of April.

Sr. No. 3 F (I) (a) (ii) AmountIn advance service to be provided 44499.82

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44499.82


Sr. No. 3 F (I) (g) (h) (i) AmountService Tax payable 5339.98Education Cess Payable 106.80Secondary and higher education CessPayable

53.40



44499.82

Note : You can also post the same transaction through Cash Receipt Voucher, BankReceipt Voucher, Payment Journal, Cash Receipt Journal and General Journal.

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Sales Transaction for populating amount received against export of services in ST-3 return.


Select the Nature of Services as “Export” on 40000 Mumbai Graphics Company –Customer Card.

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In case of Export Sale of Services, fill the fields in the Sales Order form as follows:

On the Header:

Sell-to Customer No : 40000 (Nature of Services should be Export in Customer Card)

Structure: Service Tax Payment Method Code: Cash (On the Invoicing tab)Location Code : RED (On the Shipping tab)

On the Line:


Calculate Structure

Press F9 (The program will not calculate Service Tax in case of Export Sale of Services)

Post the Order.

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G/L Entry

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Cr. 500000

Customer A/C Dr. 500000Cash A/C Dr. 500000Customer A/C Cr. 500000

In this case program will not calculate any service tax amount.

The program will also create service tax entry and Service Tax entry detail.

Service Tax Entry

The program will create service tax entry with Zero amount of service tax, eCess andSHE Cess. And also updates the Nature of Services as Export in Service Tax Entry.


The program will create service tax entry detail with Zero amount of service tax, eCessand SHE Cess. And also updates the Nature of Services as Export in Service Tax EntryDetail.


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The program will display the following values in Sr. No. 3.F. (I) (c) (i) of ST-3 return for the month of April.

Sr. No. 3.F. (I) (c) (i) Amount Amount received against export of service 500000



500000

The program will display the following values in Sr. No. 3.F. (II) (l) of ST-3 return for themonth of April.

Sr. No. 3 F (II) (l) Amount Amount charged for exported serviceprovided/to be provided.

500000

Note 1 : You can post the same transaction through Sales Invoice.Note 2: The program will display the values in the above Serial Number from ServiceTax entries and Service Tax entry details which has been created through SalesOrders/Invoices, Sales Return Order/Credit Memo, General Journal, Journal Voucher,Cash Receipt Voucher, Payment Journal, Cash Receipt Voucher, and Bank ReceiptVoucher

Note 3: Those Service Tax Entries having the value “export” in Nature of Services fieldwill not be allowed in Service Tax Adjustment form for adjustments.

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Sales Transaction for populating amount received against sale of exempted services in ST-3 return.


Select the Nature of Services as “Exempted” on Customer Card No. 60000 (BlanemarkHifi Shop).

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In case sale of Exempted Services, fill the fields in the Sales Order form asfollows:

On the Header:

Sell-to Customer No : 60000 (Nature of Services should be Exempted in Customer Card)

Structure: Service Tax Payment Method Code: Cash (On the Invoicing tab)Location Code : RED (On the Shipping tab)

On the Line:


Calculate Structure

Press F9 (The program will not calculate Service Tax in case of exempted Services)

Post the Order.

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G/L Entry

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Cr. 50000



The program will also create service tax entry and service tax entry detail.

Service Tax Entry

The program will create service tax entry with Zero amount of service tax, eCess andSHE Cess. And also updates the Nature of Services as Exempted in Service Tax Entry.


The program will create service tax entry detail with Zero amount of service tax, eCessand SHE Cess. And also updates the Nature of Services as Exempted in Service TaxEntry detail.


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The program will display the following values in Sr. No. 3.F. (I) (c) (ii) of ST-3 return for the month of April.

Sr. No. 3.F. (I) (c) (ii) Amount Amount received/paid# towards exemptedservices (other than export of service, i.e.,(i) above)

50000



50000

The program will display the following values in Sr. No. 3.F. (II) (m) of ST-3 return for themonth of April.

Sr. No. 3 F (II) (m) Amount Amount charged for exempted serviceprovided/to be provided (other than exportof service given at (1) above)

50000

Note 1 : You can post the same transaction through Sales Invoice.

Note 2: The program will display the values in the above Serial Number from ServiceTax entries and Service Tax entry details which has been created through SalesOrders/Invoices, Sales Return Order/Credit Memo, General Journal, Journal Voucher,Cash Receipt Voucher, Payment Journal, Cash Receipt Voucher, and Bank ReceiptVoucher.

Note 3: Those Service Tax Entries having the value “exempted” in Nature of Servicesfield will not be allowed in Service Tax Adjustment form for adjustments.

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Sales Transaction for populating amount received as Pure Agent in ST-3 return.


Field Description:

Invoicing tab

Field DescriptionST Pure Agent Place a check mark in this field if the

amount of services is charged as pureagent.

In case of Pure Agent, fill the fields in the Sales Order form as follows:

On the Header:

Sell-to Customer No : 10000 Structure: Service Tax Payment Method Code: Cash (On the Invoicing tab)Location Code : RED (On the Shipping tab)ST Pure Agent : True (In Invoicing tab)

On the Line:

Type : G/L Account

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No. : 8470 Description : Advertising & Media A/C Location Code : RED Quantity: 1 Unit Price: 20000 Line Amount: 20000

Calculate Structure

Press F9 (The program will not calculate Service Tax in case of pure agent)

Post the Order.


Navigation:


History→

Posted Invoice

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G/L Entry



Cr. 20000




Service Tax Entry

The program will create service tax entry with Zero amount of service tax, eCess andSHE Cess. And also updates the ST Pure Agent field with value Yes in Service TaxEntry.

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The program will create service tax entry detail with Zero amount of service tax, eCessand SHE Cess. And also updates the ST Pure Agent field with value Yes in Service TaxEntry Detail.



The program will display the following values in Sr. No. 3.F. (I) (c) (iii) of ST-3 return for the month of April.

Sr. No. 3.F. (I) (c) (iii) Amount Amount received as/(paid to #) pure agent 20000



20000

The program will display the following values in Sr. No. 3.F. (II) (n) of ST-3 return for themonth of April.

Sr. No. 3 F (II) (n) Amount Amount charged as pure agent 20000

Note 1 : You can post the same transaction through Sales Invoice.

Note 2: The program will display the values in the above Serial Number from ServiceTax entries and Service Tax entry details which has been created through SalesOrders/Invoices, Sales Return Order/Credit Memo, General Journal, Journal Voucher,

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Cash Receipt Voucher, Payment Journal, Cash Receipt Voucher, and Bank ReceiptVoucher.

Note 3: Those Service Tax Entries having the ST Pure Agent field “Yes” will not beallowed in Service Tax Adjustment form for adjustments.

Sales Transaction for populating Abatement Claimed in ST-3 return.


In case of Abatement Claimed, fill the fields in the Sales Order form as follows:

On the Header:

Sell-to Customer No : 50000 Structure: Service Tax Payment Method Code: Cash (On the Invoicing tab)Location Code : RED (On the Shipping tab)

On the Line:

Type : G/L Account No. : 8470

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Description : Advertising & Media A/C Location Code : RED Quantity: 1 Unit Price: 50000 Line Amount: 50000

Calculate Structure

Press F9 to view the service tax amount. (In this case Abatement % in service tax setupis 75)

Post the Order.



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G/L Entry



Cr. 50000


A/C

Cr. 1545

Customer A/C Dr. 51545Cash A/C Dr. 51545

Service TaxPayable A/C Cr. 1545


A/C

Dr. 1545

Customer A/C Cr. 51545

In this case program has calculated service tax after considering abatement %.


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Service Tax Entry



Sr. No. 3 F (I) (a) (i) Amount

In advance service to be provided 50000

The program will display the following values in Sr. No. 3.F. (I) (d) of ST-3 return for themonth of April.

Sr. No. 3 F (I) (d) Amount Abatement amount claimed 37500



12500

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Sr. No. 3 F (I) (g) (h) (i) AmountService Tax payable 1500Education Cess Payable 30Secondary and higher education CessPayable

15



50000

The program will display the following values in Sr. No. 3.F. (II) (o) of ST-3 return for themonth of April.

Sr. No. 3 F (II) (o) Amount Amount claimed as abatement 37500

Note 1: You can also post the same transaction through Sales Invoice.

Note 2 : The program will display the values in the above Serial Number from ServiceTax entries and Service Tax entry details which has been created through Sales

Orders/Invoices, Sales Return Order/Credit Memo, General Journal, Journal Voucher,Cash Receipt Voucher, Payment Journal, Cash Receipt Voucher, Bank Receipt Voucher and Service Tax Opening form.

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GTA transaction in case of Service Receiver


Place a check mark in the GTA field in Vendor Card No. 30000 (Cool woodTechnologies).

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Navigation:Purchase → History → Posted Invoice

G/L Entry

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Particulars Type Amount (Rs.)DeliveryExpenses A/C

Dr. 50000

Service TaxPayable Interim A/C

Cr. 6180


Dr. 6180

Vendor A/C Cr. 50000Cash A/C Cr. 50000Service TaxPayable A/C

Cr. 6180

Service taxPayable Interim

A/C

Dr. 6180

Vendor A/C Dr. 50000

Service Tax Entry


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Sr. No. 3.F. (I) (a) (i) Amount Against Service Provided 50000

The program will display the following values in Sr. No. 3.F. (I ) (f) (iv) of ST-3 return for the month of April.

Sr. No. 3.F. (I ) (f) (iv) AmountValue on which Service tax is Payable @12 %

50000

The program will display the following values in Sr. No. 3.F. (I) (g), (h), (i) of ST-3 returnfor the month of April.

Sr. No. 3.F. (I ) (g), (h), (i) AmountService Tax Payable 6000Education Cess Payable 120Secondary and higher education CessPayable

60

Note1: You can also post the same transaction through Purchase Invoice, PurchaseJournal, and General Journal.

Note 2: The program will display the values of GTA related transactions in Sr. No. 3F only if the service tax group code has been assigned as Service Receiver in the setup.

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Purchase Transaction for populating Credit of CENVAT Taken on Inputs in ST-3 return.


In case of purchase of Inputs, fill the fields in the Purchase Order form as follows:

On the Header:

Buy-from Vendor No : 10000 Structure: Excise.Location Code : RED (On the Shipping tab)

On the Line:

Type : Item No. : 1000 Description : Bicycle Location Code : RED Quantity: 10 Direct Unit Cost: 10000

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G/L Entry


Particulars Type Amount (Rs.)Purchase A/C Dr. 100000CENVAT Cr.Receivable A/C

Dr. 16480

Vendor A/C Cr. 116480

Excise Entry

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RG 23 A Part I entry


The program will display the following values in Sr. No. 5B. (I) (b) (i) of ST-3 return for the month of April.

Sr. No. 5B. (I) (b) (i) AmountOn Inputs 16000

The program will display the following values in Sr. No. 5B. (II) (b) (i) of ST-3 return for the month of April.

Sr. No. 5B. (II) (b) (i) AmountOn Inputs 480

Note 1: The program will display the values in the above Serial Number from RG 23 APart II entry which has been created through Purchase Orders/Invoices, Purchase

Return Orders/Credit Memos and Transfer orders.

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Purchase Transaction for populating Credit of CENVAT Taken on Capital Goods in ST-3 return.


In case of purchase of capital goods, fill the fields in the Purchase Order form asfollows:

On the Header:

Buy-from Vendor No : 10000 Structure: Excise.Location Code : RED (On the Shipping tab)

On the Line:Type : Item No. : 80206 (capital item true in item Card) Description : Webcam Location Code : RED Quantity: 10 Direct Unit Cost: 10000 Line Amount: 100000

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Calculate Structure

Press F9 to view the Excise amount.

Post the Order.



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G/L Entry


Particulars Type Amount (Rs.)Purchase A/C Dr. 100000CENVAT Cr.Receivable A/C

Dr. 8240

CENVAT Cr.Deferred A/C

Dr. 8240

Vendor A/C Cr. 116480

Excise Entry

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The program will display the following values in Sr. No. 5B. (I) (b) (ii) of ST-3 return for the month of April.

Sr. No. 5B. (I) (b) (ii) Amount

On Capital Goods 8000

The program will display the following values in Sr. No. 5B. (II) (b) (ii) of ST-3 return for the month of April.

Sr. No. 5B. (II) (b) (ii) AmountOn Capital Goods 240

Note 1: The program will display the values in the above Serial Number from RG 23 CPart II entry which has been created through Purchase Orders/Invoices, PurchaseReturn Orders/Credit Memos and Transfer orders, Claim Deferred Excise batch job.

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Purchase Transaction for populating Credit of Input Services received in ST-3 return.


In case of purchase of input services, fill the fields in the Purchase Order form asfollows:

On the Header:

Buy-from Vendor No : 10000 Structure: Service Tax Payment Method Code : Cash

Location Code : RED (On the Shipping tab)

On the Line:

Type : G/L Account No. : 8470 Description : Advertising & Media A/C Location Code : RED

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Quantity: 1 Direct Unit Cost: 20000 Line Amount: 20000

Calculate Structure

Press F9 to view the Service Tax amount.

Post the Order.



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G/L Entry



Dr. 20000


Dr. 2472

Vendor A/C Cr. 22472Cash A/C Cr. 22472

Service TaxRecoverable A/C Dr. 2472


Cr. 2472


Service Tax Entry

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The program will display the following values in Sr. No. 5B. (I) (b) (iii) of ST-3 return for the month of April.

Sr. No. 5B. (I) (b) (iii) AmountOn input Services received directly 2400

The program will display the following values in Sr. No. 5B. (II) (b) (iii) of ST-3 return for the month of April.

Sr. No. 5B. (II) (b) (iii) AmountOn input Services received directly 72

Note 1: The program will display the values in the above Serial Number from ServiceTax entry details which has been created through Purchase Orders/Invoices, PurchaseReturn Orders/Credit Memos, General Journal, Journal Voucher, Cash PaymentVoucher, Payment Journal, Bank Payment Voucher and Service Tax Opening form.

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Credit Received from Input Service Distributor

Navigation:Financial Management → General Ledger → Periodic Activity → Service Tax →

Service Tax DistributionIn this case credit of service tax has been transferred from Silver location (ISD) to Redlocation.


No. : IPI000012 (Press F3, and number will appear automatically)

From Location : Silver Service Tax Group Code : Adv Distribution Basis : Previous Year’s Profit Posting Date : 30/04/07


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First Line

To Location : Red Distribution % : 50 Distribution Amount : 3090.00

Second Line

To Location : Blue Distribution % : 50 Distribution Amount : 3090.00 Loading on Services Account : True


Total Distribution %: 100.00 Total Distribution Amount : 6180.00 Total Applied Amount: 6180.00


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G/L Entry

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Particulars Type Amount(Rs)Service Tax Recoverable A/C –Red Location

DR 3090.00

Service Tax Receivable(Distribution) A/C – Silver Location

CR 3090.00


The program will also create service tax entry and service tax entry detail in the RedLocation.

Service Tax Entry


The program will display the following values in Sr. No. 5B. (I) (b) (iv) of ST-3 return for the month of April.

Sr. No. 5B. (I) (b) (iv) Amount As received from input service distributor 3000

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The program will display the following values in Sr. No. 5B. (II) (b) (iv) of ST-3 return for the month of April.

Sr. No. 5B. (II) (b) (iv) Amount As received from input service distributor 90

Credit Received from inter unit transfer by a LTU.


In this case credit of Excise amount has been transferred from Blue location (which isLTU) to Red location.

Enter the following information in Transfer Order:

Header

Transfer-from Code : Blue Transfer –to Code : Red In-Transit Code : Out. Log. Structure: Excise

Line

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Item No.: 1000 Description: Bicycle Quantity: 10 Transfer Price : 1000 Amount: 10000

Click functions menu button and click Calculate Structure Values to calculate Excise.

Post the Transfer Order as Ship and Receive.


Navigation:Warehouse → History → Posted Documents → Posted Transfer Shipments

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G/L Entry

The program will Credit the Excise Payable account with Excise duty Rs. 1648.

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Navigation:Warehouse → History → Posted Documents → Posted Transfer Receipts

G/L Entry

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The program will debit CENVAT Cr. Receivable A/C with Excise duty Rs. 1648 and thesame amount will be displayed in ST-3 return.

Excise Entry



The program will display the following values in Sr. No. 5B. (I) (b) (v) of ST-3 return for the month of April.

Sr. No. 5B. (I) (b) (v) AmountFrom inter unit transfer by a LTU 1600

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The program will display the following values in Sr. No. 5B. (II) (b) (v) of ST-3 return for the month of April.

Sr. No. 5B. (II) (b) (v) AmountFrom inter unit transfer by a LTU 48

Note: In case “Central STC Applicable” field in Company Information in checked thenthe program will display the above values in Sr. No. 5B (I) (b) (i)/(ii) and 5B (II) (b) (i)/(ii) instead of displaying it in Sr. No. 5B. (I) (b) (v) and 5B. (II) (b) (v).

Purchase Transaction for populating the amount of credit taken (for distribution) on input services

Purchase of Services in Silver location which is Input Service Distributor


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On the Header:

Buy-from Vendor No : 20000 Structure: Service Tax Payment Method Code : Cash Location Code : SILVER (On the Shipping tab) (Input Service Distributor

field should be checked in location card)

On the Line:

Type : G/L Account No. : 8470 Description : Advertising & Media A/C Location Code : SILVER Quantity: 1 Direct Unit Cost: 50000 Line Amount: 50000

Calculate Structure


Post the Order.

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G/L Entry



Dr. 50000

Service TaxReceivableInterim (Dist) A/C

Dr. 6180


Service TaxRecoverable(Dist.) A/C

Dr. 6180


Cr. 6180


Service Tax Entry

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Input Service Distribution Transaction for populating service tax amount distributed in ST-3 return.Navigation:Financial Management → General Ledger → Periodic Activity → Service Tax → Service Tax Distribution

In case services are purchased in Silver location and amount of service tax has to bedistributed in Red location @ 50% and 50% to be loaded on services account.


No. : IPI000012 (Press F3, and number will appear automatically)From Location : Silver Service Tax Group Code : Adv Distribution Basis : Previous Year’s Profit Posting Date : 30/04/07


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First LineTo Location : Red Distribution % : 50 Distribution Amount : 3090.00

Second Line

To Location : Blue Distribution % : 50 Distribution Amount : 3090.00 Loading on Services A/C : True


Total Distribution %: 100.00 Total Distribution Amount : 6180.00 Total Applied Amount: 6180.00 Post the Service tax Distribution form.

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Navigation:Financial Management → General Ledger → History → Service Tax → PostedService Tax Distribution.


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The program will create G/L Entries, Service Tax Entry in receiving locations andService Tax Distribution entries.

G/L Entry

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Also the program will create the G/L entry for loading on the Services account with sameoriginal document number which has been used while posting the invoice.


Particulars Type Amount(Rs)Service Tax Recoverable A/C –Red Location

DR 3090.00

Service Tax Receivable(Distribution) A/C – Silver Location

CR 3090.00

Particulars Type Amount(Rs) Advertising & Media A/C DR 3090Service Tax Receivable(Distribution) A/C – Silver Location

CR 3090

The program will load the amount on the Service account by debiting it and credit theService Tax Receivable (Distribution) A/C. No service tax entry will be created for thisamount.

The program will also create service tax entry and service tax entry detail in the RedLocation.

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Service Tax Entry


Service Tax Distribution Entries

The program will display the following values in Sr. No. 6. (I) (c) of ST-3 return for themonth of April.

Sr. No. 6. (I) (c) Amount

Credit distributed 3000The program will display the following values in Sr. No. 6. (I) (d) of ST-3 return for themonth of April.

Sr. No. 6. (I) (d) AmountCredit not eligible for distribution 3000

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The program will display the following values in Sr. No. 6. (II) (c) of ST-3 return for themonth of April.

Sr. No. 6. (II) © AmountCredit of education Cess and secondaryand higher education Cess distributed.

90

The program will display the following values in Sr. No. 6. (II) (d) of ST-3 return for themonth of April.

Sr. No. 6. (II) (d) AmountCredit of education Cess and secondaryand higher education Cess not eligible for distribution.

90

Purchase Transaction for populating the amount of credit taken (for distribution) on input services

Purchase of services in the Silver location which is Input Service Distributor and thecredit of service tax are not yet distributed.


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On the Header:

Buy-from Vendor No : 20000 Structure: Service Tax Payment Method Code : Cash Location Code : SILVER (On the Shipping tab) (Input Service Distributor

field should be checked in location card)

On the Line:

Type : G/L Account No. : 8470 Description : Advertising & Media A/C Location Code : SILVER Quantity: 1 Direct Unit Cost: 20000 Line Amount: 20000

Calculate Structure


Post the Order.

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Navigation:

Purchase → History → Posted Invoice

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G/L Entry



Dr. 20000


Dr. 2472


Service TaxRecoverable(Dist.) A/C

Dr. 2472


Cr. 2472


Service Tax Entry

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The program will display the following values in Sr. No. 6. (I) (b) of ST-3 return for themonth of April.

Sr. No. 6. (I) (b) AmountCredit taken (for distribution on inputservice

2400

The program will display the following values in Sr. No. 6. (II) (b) of ST-3 return for themonth of April.

Sr. No. 6. (II) (b) AmountCredit of education Cess and secondaryand higher education Cess taken (for distribution) on input service.

72

Note 1: The program will display the values in the above Serial Number from ServiceTax entry details which has been created through Purchase Orders/Invoices, PurchaseReturn Orders/Credit Memos, General Journal, Journal Voucher, Cash PaymentVoucher, Payment Journal, Bank Payment Voucher and Service Tax Opening form.

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Payment of GTA Service Tax Liability in Cash

Navigation:

Financial Management → General Ledger → Periodic Activities → Service Tax → Payment


Service Tax Registration No .: RED118910100578 Date Filter : 01-04-2007 GTA: True Document No .: PAYSER04 Posting Date : 05-05-2007



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The program populates the values in the following fields as:

Service Tax Group Code : TRANSPORT Description : Transport of Goods by Road Payment Liability : 6000.00 Payment Liability (eCess) : 120.00 Payment Liability (SHE Cess) : 60.00


Payment Amount : 6000.00 Payment Amount (eCess) : 120.00 Payment Amount (SHE Cess) : 60.00 Account Type: G/L Account Account No.: 2910 (Cash)


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Navigation:


General Ledger →

History→

Navigate

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G/L Entry

The program creates the following G/L entry:Particulars Type Amount(Rs)Service Tax Payable A/C DR 6180.00Service Tax Recoverable A/C DR 6180.00Service Tax receivable Interim A/C CR 6180.00Cash A/C CR 6180.00

The program will display the following values in Sr. No. 4A. (I) (a) (i) of ST-3 return for the month of April.

Sr. No. 4A. (I) (a) (i) AmountService Tax paid- In Cash 6000

The program will display the following values in Sr. No. 4A. (I) (b) (i) of ST-3 return for the month of April.

Sr. No. 4A. (I) (b) (i) AmountEducation Cess paid- In Cash 120

The program will display the following values in Sr. No. 4A. (I) (c) (i) of ST-3 return for

the month of April.

Sr. No. 4A. (I) (c) (i) AmountSecondary and higher education Cesspaid- In Cash

60

The program will display the following values in Sr. No. 5B. (I) (b) (iii) of ST-3 return for the month of April.

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Sr. No. 5B. (I) (b) (iii) AmountOn inputs services received directly 6000

The program will display the following values in Sr. No. 5B. (II) (b) (iii) of ST-3 return for the month of April.

Sr. No. 5B. (II) (b) (iii) AmountOn inputs services received directly 180


Navigation:Financial Management → General Ledger → Periodic Activities → Service Tax → Update Challan Details

On the Functions menu button click Update Challan Details menu item for the selectedentry.

Update ST Challan Details form will open.

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Enter the following information for Service Tax Payment Doc. No. PAYSER04 .

Challan No.: CHNO.001 Challan Date: 05-05-07 Bank Name: UTI BANK LTD.Branch: NEW DELHI

Click Ok button to update the details.

The program will display the following values in Sr. No. 4A. (II) (a) of ST-3 return for themonth of April.

Sr. No. 4A. (II) (a) ValueChallan CHNO.001

The program will display the following values in Sr. No. 4A. (II) (b) of ST-3 return for themonth of April.

Sr. No. 4A. (II) (b) ValueChallan date 05-05-07

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Utilizing Service Tax Credit and Excise Credit While Making Payment of Service Tax Liability in Cash.

Excise as Service Tax Credit

Navigation:Financial Management → General Ledger → Periodic Activities → Service Tax → Excise as Service Tax Credit

Select the RG Register Type and location E.C.C. number for which you want to avail theExcise credit.

Click OK.

The Avail RG 23 A Part II Credit form opens. In this form you can select the RG 23 Apart II entry which you want to adjust in service tax liability.

Click OK.

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Service Tax Payment form

Navigation:Financial Management → General Ledger → Periodic Activities → Service Tax → Payment


Service Tax Registration No .: RED118910100578 Date Filter : 01-04-2007 Document No .: PAYSER004 Posting Date : 05-05-2007 Location E.C.C. No: RXBVS7543890



The program populates the values in the following fields in Pay Service tax form as:

Service Tax Group Code : ADV Description : Advertisement Payment Liability : 12000.00 Payment Liability (eCess) : 240.00

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Payment Liability (SHE Cess) : 120.00

Service Tax Group Code : TRANSPORT Description : Transport of Goods by Road Credit Available : 6000.00 Credit Available (eCess) : 120.00 Credit Available (SHE Cess) : 60.00

Excise as Service TaxCredit Available RG 23 A Part II: 16000.00 Credit Available RG 23 A Part II (eCess): 336.00 Credit Available RG 23 A Part II (SHECess): 168.00

On the Line menu button click Excise CENVAT Claim menu item to utilize the credit of excise.

Excise as Service Tax Credit form


BED Amount : 4000.00 ECESS Amount : 80.00 SHE CESS Amount : 40.00

Close the form

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Enter the values in the following fields in Pay Service Tax form:

Credit Availed : 3000.00 Credit Availed (eCess) : 60.00 Credit Availed (SHE Cess) : 30.00

Payment Amount: 5000 Payment Amount (eCess): 100

Payment Amount (SHE Cess): 50 Account type: G/L Account Account No: 2910 (Cash)


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Navigation:


General Ledger →

History→

Navigate

G/L Entry

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Particulars Type Amount(Rs)CENVAT Cr. Receivable A/C CR 4120.00Service Tax Payable A/C DR 12360.00Service Tax Recoverable A/C CR 3090.00Cash A/C CR 5150.00

RG 23 A Part II entry

The program will populate the utilized amounts in BED debit, ECess Debit and SHECess Debit fields.

The program will display the following values in Sr. No. 4A. (I) (a) (i) of ST-3 return for the month of April.

Sr. No. 4A. (I) (a) (i) AmountService Tax Paid- in Cash 5000

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The program will display the following values in Sr. No. 4A. (I) (a) (ii) of ST-3 return for the month of April.

Sr. No. 4A. (I) (a) (ii) AmountService Tax Paid- by CENVAT Credit 7000

The program will display the following values in Sr. No. 4A. (I) (b) (i) of ST-3 return for the month of April.

Sr. No. 4A. (I) (b) (i) AmountEducation Cess Paid- in Cash 100

The program will display the following values in Sr. No. 4A. (I) (b) (ii) of ST-3 return for the month of April.

Sr. No. 4A. (I) (b) (ii) AmountEducation Cess Paid- by CENVAT Credit 140

The program will display the following values in Sr. No. 4A. (I) (c) (i) of ST-3 return for the month of April.

Sr. No. 4A. (I) (c) (i) AmountSecondary and higher Education CessPaid- in Cash

50

The program will display the following values in Sr. No. 4A. (I) (c) (ii) of ST-3 return for the month of April.

Sr. No. 4A. (I) (c) (ii) AmountSecondary and higher Education CessPaid- by CENVAT Credit

70

The program will display the following values in Sr. No. 5B. (I) (c) (i) of ST-3 return for the month of May.

Sr. No. 5B. (I) (c) (i) AmountFor Payment of Service Tax 7000

The program will display the following values in Sr. No. 5B. (II) (c) (i) of ST-3 return for the month of May.

Sr. No. 5B. (I) (c) (i) AmountFor Payment of education Cess andsecondary and higher education Cess onService Tax

210

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Utilizing Service Tax Credit and Excise Credit While Making Payment of Arrears of Service Tax Liability in Cash with Interest and Penalty

Service tax liability for April 2007 is now being paid on 10/05/07 which is after the duedate (05/05/07). The program will identify the payment liability amount as Arrears.

Service Tax Payment form

Navigation:Financial Management → General Ledger → Periodic Activities → Service Tax →

Payment

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Service Tax Registration No .: RED118910100578 Date Filter : 01-04-2007..30-04-07 Document No .: PAYSER0004 Posting Date : 10-05-2007 Location E.C.C. No: RXBVS7543890



Fields Description:

Fields DescriptionPay. Liability Arrear This field shows the amount of service tax

which is identified as arrear on the basis of service tax payment due date.

Pay. Liability (eCess) Arrear This field shows the amount of service taxeCess which is identified as arrear on thebasis of service tax payment due date.

Pay. Liability (SHE Cess) Arrear This field shows the amount of service taxSHE Cess which is identified as arrear onthe basis of service tax payment due date.

The program populates the values in the following fields in Pay Service tax form as:

Service Tax Group Code : ADV Description : Advertisement Payment Liability : 6839.98 Payment Liability Arrear : 6839.98 Payment Liability (eCess) : 136.80 Payment Liability (eCess) Arrear : 136.80 Payment Liability (SHE Cess) : 68.40 Payment Liability (SHE Cess) Arrear : 68.40

Service Tax Group Code : TRANSPORT Description : Transport of Goods by Road Credit Available : 3000.00 Credit Available (eCess) : 60.00

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Credit Available (SHE Cess) : 30.00

Excise as Service TaxCredit Available RG 23 A Part II: 12000.00 Credit Available RG 23 A Part II (eCess): 256.00 Credit Available RG 23 A Part II (SHECess): 128.00

On the Line menu button click Excise CENVAT Claim menu item to utilize the credit of excise.

Excise as Service Tax Credit form


BED Amount : 1000.00 ECESS Amount : 20.00 SHE CESS Amount : 10.00

Close the form

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Fields Description:

Fields DescriptionPay. Amount Arrear Enter the amount of service tax arrear

which has to be paid in cash.

Pay. Amount (eCess) Arrear Enter the amount of service tax eCessarrear which has to be paid in cash.

Pay. Amount (SHE Cess) Arrear Enter the amount of service tax SHE Cessarrear which has to be paid in cash.

Penalty Paid Enter the amount of penalty which has tobe paid in cash.

Penalty Account No. Choose the Penalty account No. fromlookup list in which penalty amount has tobe debited.

Section 73A Amount Enter the amount of Section 73A whichhas to be paid in cash.

Section 73A Account No. Choose the Section 73A account No. fromlookup list in which Sec 73A amount has tobe debited.

Other Amt. Arrear Enter the amount of other Arrear (ServiceTax) which has to be paid in cash.

Other Amt. eCess Arrear Enter the amount of other Arrear (eCess)which has to be paid in cash.

Other Amt. SHE Cess Arrear Enter the amount of other Arrear (SHECess) which has to be paid in cash.

Other Amt. Arrear Account No. Choose the Other Amt. Arrear account No.from lookup list in which Other Amt. Arrear (ST, eCess and SHE Cess) amounts hasto be debited.

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Enter the values in the following fields in Pay Service Tax form:

Credit Availed : 3000.00 Credit Availed (eCess) : 60.00 Credit Availed (SHE Cess) : 30.00

Payment Amount: 5189.98 Pay. Amount Arrear: 2839.98 Payment Amount (eCess): 76.80 Pay. Amount (eCess) Arrear: 56.80

Payment Amount (SHE Cess): 38.40 Pay. Amount (SHE Cess) Arrear: 28.40 Account type: G/L Account Account No: 2910 (Cash)Interest Amount: 1000.00 Interest Account No.: 9280 (Interest on Service Tax) Other Amount: 200.00 Other Amount Account No.: 9280 (Interest on Service Tax) Penalty Paid: 100.00 Penalty Account No.: 9280 (Interest on Service Tax)Section 73A Amount: 50.00 Section 73A Account No.: 9280 (Interest on Service Tax) Other Amt. Arrear: 1000.00 Other Amt. (eCess) Arrear: 20.00 Other Amt. (SHE Cess) Arrear: 10.00 Other Amt. Arrear Account No.: 5924 (Service Tax Payable II)

On the Line menu button click the Source Document menu item.

ST3 Source Document Details form will open.

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Field Description:

Fields DescriptionSource Document No. Enter the Source Document No. for the

Month/Qtr.Source Document Date Enter the Source Document Date.

Enter the following values in ST3 Source Document Details form:

Source Document No.: ST004/06-07 Source Document Date: 10-05-07

Close the form

The program will display the following values in Sr. No. 4B. of ST-3 return.

Sr. No. 4B ValuesS.No 1Month/Quarter MaySource Document No. ST004/06-07Source Document Date 10-05-07

On the Line menu button click the Payment Detail menu item.

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ST Monthly Payment Dtl Buffer form will open.

In this form you can enter the Month wise details of Interest amount, penalty amount,Section 73A amount, any other amount and other Amount (ST, eCess and SHE Cess)

Arrear.

Fields Description:

Fields DescriptionLiability Date Enter the date for which you are paying

liability.

Interest Amount Enter the Interest amount which has to bepaid. Amount in this field should be equalto Amount entered in Interest Amount fieldin pay service tax form.

Penalty Amount Enter the Penalty amount which has to bepaid. Amount in this field should be equalto Amount entered in penalty Paid field in

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pay service tax form.

Section 73A Amount Enter the Sec 73A amount which has to bepaid. Amount in this field should be equalto Amount entered in Section 73 A Amountfield in pay service tax form.

Any other Amount Enter the other amount which has to bepaid. Amount in this field should be equalto Amount entered in other Amount field inpay service tax form.

Other Arrear Amt. Enter the other arrear amount which has tobe paid. Amount in this field should beequal to Amount entered in other arrear amount field in pay service tax form.

Other eCess Arrear Amt. Enter the other eCess arrear amount whichhas to be paid. Amount in this field shouldbe equal to Amount entered in other eCESS arrear amount field in pay servicetax form.

Other SHE Cess Arrear Amt. Enter the other SHE Cess arrear amountwhich has to be paid. Amount in this fieldshould be equal to Amount entered inother SHE Cess arrear amount field in payservice tax form.

Enter the following values in ST Monthly Payment Dtl Buffer form:

Liability Date : 30-04-07 Interest Amount: 1000.00 Penalty Amount: 100.00 Section 73 A Amount: 50.00 Any Other Amount: 200.00 Other Arrear Amt.: 1000.00 Other eCess Arrear Amt.: 20.00 Other SHE Cess Arrear Amt.: 10.00

Close the form.


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G/L Entry


Particulars Type Amount(Rs)CENVAT Cr. Receivable A/C CR 1030.00Interest on Service Tax A/C DR 1350.00Service Tax Payable II A/C DR 1030.00Service Tax Payable I A/C DR 7045.18Service Tax Recoverable A/C CR 3090.00Cash A/C CR 5305.18

RG 23 A Part II entry


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The program will display the following values in Sr. No. 4A. (I) (d) (i) of ST-3 return for the month of April.

Sr. No. 4A. (I) (d) (i) Amount Arrears of revenue paid in cash 3839.98

The program will display the following values in Sr. No. 4A. (I) (d) (ii) of ST-3 return for the month of April.

Sr. No. 4A. (I) (d) (ii) Amount Arrears of revenue paid by credit 4000.00

The program will display the following values in Sr. No. 4A. (I) (d) (iii) of ST-3 return for the month of April.

Sr. No. 4A. (I) (d) (iii) Amount Arrears of education Cess paid in cash 76.80

The program will display the following values in Sr. No. 4A. (I) (d) (iv) of ST-3 return for the month of April.

Sr. No. 4A. (I) (d) (iv) Amount Arrears of education Cess paid by credit 80.00

The program will display the following values in Sr. No. 4A. (I) (d) (v) of ST-3 return for the month of April.

Sr. No. 4A. (I) (d) (v) Amount Arrears of Sec and higher education Cess

paid in cash

38.40

The program will display the following values in Sr. No. 4A. (I) (d) (vi) of ST-3 return for the month of April.

Sr. No. 4A. (I) (d) (vi) Amount Arrears of Sec and higher education Cesspaid by credit

40.00

The program will display the following values in Sr. No. 4A. (I) (d) (vii) of ST-3 return for the month of April.

Sr. No. 4A. (I) (d) (vii) AmountInterest paid 1000.00

The program will display the following values in Sr. No. 4A. (I) (d) (viii) of ST-3 return for the month of April.

Sr. No. 4A. (I) (d) (viii) AmountPenalty paid 100.00

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The program will display the following values in Sr. No. 4A. (I) (d) (xi) of ST-3 return for the month of April.

Sr. No. 4A. (I) (d) (xi) AmountSection 73 A Amount paid 50.00

The program will display the following values in Sr. No. 4A. (I) (d) (x) of ST-3 return for the month of April.

Sr. No. 4A. (I) (d) (x) Amount Any other amount 200.00

The program will display the following values in Sr. No. 5B. (I) (c) (i) of ST-3 return for the month of May.

Sr. No. 5B. (I) (c) (i) AmountFor Payment of Service Tax 4000

The program will display the following values in Sr. No. 5B. (II) (c) (i) of ST-3 return for the month of May.

Sr. No. 5B. (I) (c) (i) AmountFor Payment of education Cess andsecondary and higher education Cess onService Tax

120




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Utilizing Service Tax Credit and Excise Credit while Making Payment of Excise Duty

There should be some liability of Excise Duty which has to be settled with Service Tax

Credit and Excise Credit.

Navigation:Financial Management → General Ledger → Periodic Activities → Service Tax → Service Tax as Excise Credit.

Select the service tax registration number and location E.C.C. number for which youwant to avail the service tax credit.

Click OK.

The Avail Service Tax Credit form opens. In this form you can select the service taxentry which you want to adjust in excise duty liability.

Click OK.

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Payment of Excise Duty


Enter the following Information on the General Journal line to pay excise duty.

Posting Date : 30-04-07 Document Type : Payment Document No.: G00069 Account Type: G/L Account Account No.: 2994 Description : Excise Payable Account Service Tax Registration No. : RED118910100578 E.C.C. No.: RXBVS7543890

On the Functions menu button, select the Payments menu item, and then click Excise.

The Pay Excise window opens.


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The program opens the Excise CENVAT Claim form. In this form values of credit will bepopulated under the RG 23 A and RG 23 C headings as:

RG 23 A


RG 23 C


The program opens the Excise CENVAT Claim form. In this form values will bepopulated under the Excise Payable and Service Tax headings as:

Excise Payable


Service Tax

Service Tax as Excise Credit : 5400.00 eCess on Service Tax as Excise Credit : 108.00 SHE Cess on Service Tax as Excise Credit : 54.00

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Enter the values of service tax credit which has to be utilized for Excise Payable:

BED Amount : 5400.00 eCess Amount : 108.00 SHE Cess Amount : 54.00

Click the Detail menu button to enter the values.


The program will show you the total liability according to the duty on each tab. Theprogram will also show you the credit available for each component on the top line.

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In the above forms, you can see that for each duty the program is displaying liability andremaining liability. When you settle amount of duty with credit available then theremaining liability will be reduced to zero.

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Excise liability has been settled with RG 23 A and RG 23 C in the above screen shots.

RG 23 A tab:

BED Amount Liability with RG 23 A BED Amount: 5300.00 ECESS Amount Liability with RG 23 A ECESS Amount: 106.00 SHE ECESS Amount Liability with RG 23 A SHE ECESS Amount : 53.00

RG 23 C tab:

BED Amount Liability with RG 23 C BED Amount: 5300.00 ECESS Amount Liability with RG 23 C ECESS Amount : 106.00 SHE ECESS Amount Liability with RG 23 C SHE ECESS Amount : 53.00

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The program will populate the value in Amount field of the General Journal.




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G/L Entry

The program creates the following G/L entry:Particulars Type Amount(Rs)Excise Payable A/C DR 16480.00CENVAT Cr. Receivable A/C CR 5459.00CENVAT Cr. Receivable A/C CR 5459.00Service Tax Recoverable A/C CR 5562.00

RG 23 A Part II


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RG 23 C Part II


Note: You can utilize the credits of Excise and Service Tax while using Direct Debit to

PLA/RG functionality through Sales Order/Invoice.

The program will display the following values in Sr. No. 5B. (I) (c) (iii) of ST-3 return for the month of April.

Sr. No. 5B. (I) (c) (iii) AmountFor payment of excise or any other duty 16000

The program will display the following values in Sr. No. 5B. (II) (c) (ii) of ST-3 return for the month of April.

Sr. No. 5B. (II) (c) (ii) Amount

For payment of education Cess andsecondary and higher education Cess ongoods

480

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ST3 Removed as such/LTU Dtl.

Navigation:Financial Management → General Ledger → Periodic Activities → Service Tax →

ST3 Removed as such/LTU Dtl.

In this form you can enter the values of Credit utilized towards clearance of Input goodsand capital goods removed as such and towards inter unit transfer of LTU.

Fields Description:

Fields Description

Service Tax Registration No. Choose the service tax registration number from lookup list.

Date Enter the date of utilization.

For Removed as such Enter the amount of Excise componentsexcluding eCess and SHE Cess amountswhich has been utilized for Removed asSuch.

For Removed as such (eCess) Enter the amount of Excise eCess whichhas been utilized for Removed as Such.

For Removed as such (SHE Cess) Enter the amount of Excise SHE Cesswhich has been utilized for Removed asSuch.

From ITU for LTU Enter the amount of Excise componentsexcluding eCess and SHE Cess amountswhich have been utilized towards inter unittransfer of LTU.

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From ITU for LTU (eCess) Enter the amount of Excise eCess which

have been utilized towards inter unittransfer of LTU.

From ITU for LTU (SHE Cess) Enter the amount of Excise SHE Cesswhich have been utilized towards inter unittransfer of LTU.

Enter the following information in ST3 Removed as such/LTU Dtl.

Service Tax Registration No.: RED118910100578 Date: 30-04-07 For Removed as Such: 2000 For Removed as Such (eCess): 40 For Removed as Such (SHE Cess): 20 From ITU for LTU: 1000 From ITU for LTU (eCess): 20 From ITU for LTU (SHE Cess): 10

After entering the values in the above form program will change the values in Sr. No. 5B(I) © (iii) and 5B (II) © (ii) of ST-3.

The program will display the following values in Sr. No. 5B. (I) (c) (iii) of ST-3 return for the month of April.

Sr. No. 5B. (I) (c) (iii) AmountFor payment of excise or any other duty 13000

The program will display the following values in Sr. No. 5B. (I) (c) (iv) of ST-3 return for the month of April.

Sr. No. 5B. (I) (c) (iv) AmountTowards clearance of input goods andcapital goods removed as such

2000

The program will display the following values in Sr. No. 5B. (I) (c) (v) of ST-3 return for the month of April.

Sr. No. 5B. (I) (c) (v) AmountTowards inter unit transfer of LTU 1000

The program will display the following values in Sr. No. 5B. (II) (c) (ii) of ST-3 return for the month of April.

Sr. No. 5B. (II) (c) (ii) AmountFor payment of education Cess andsecondary and higher education Cess ongoods

390

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The program will display the following values in Sr. No. 5B. (II) (c) (iii) of ST-3 return for the month of April.

Sr. No. 5B. (II) (c) (iii) AmountTowards payment of education Cess andsecondary and higher education Cess onclearance of input goods and capital goodsremoved as such

60

The program will display the following values in Sr. No. 5B. (II) (c) (iv) of ST-3 return for the month of April.

Sr. No. 5B. (II) (c) (iv) AmountTowards inter unit transfer of LTU 30

Note 1: In“ST3 Removed as such/LTU Dtl. Form” enter the correct amounts of Creditwhich has been utilized for payment of excise duty.

Note 2: The program will not allow the user to enter the values in From ITU for LTU,From ITU for LTU (eCess) and From ITU for LTU (SHE Cess) fields in ST3 Removed assuch/LTU Dtl. Form if Central STC Applicable is checked in Company Information.

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Report

Form ST-3

Navigation:Financial Management → General Ledger → Reports → Service Tax Reporting→ Form ST-3

On the Options tab

Fields DescriptionService Tax Reg. No. Choose the Service Tax Registration No.

from lookup list for which you want togenerate the report.

Half Yearly Period Choose the option from drop down buttonfor which period you want to generate thereport. The options available are blank,

Apr-Sept, Oct-March.

Year Enter the year for which you want togenerate the report.For Example: Value entered in this field is 2007, and

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Fields Descriptionthen the program will display it in the reportagainst Financial Year field “2007-08 ”.

Place Submitted Enter the Place where ST-3 has to besubmitted and the program will display thesame under Sr. No. 7 (Self Assessmentmemorandum) against Place field.

Date Submitted Enter the Date on which ST-3 has to besubmitted and the program will display thesame under Sr. No. 7 (Self Assessmentmemorandum) against Date field.

Whether providing any exempted or nontaxable service (‘Y/N’)

Place a check mark in this field if you areproviding any exempted or non taxableservice. In Sr. No. 5A (a) and (c) programwill display the value as “Y” on the basis of check mark in this field.Note : This field is not applicable for servicereceiver and input service distributor.

Whether manufacturing any exemptedgoods (‘Y/N’)

Place a check mark in this field if you aremanufacturing any exempted goods. In Sr.No. 5A (b) and (c) program will display thevalue as “Y” on the basis of check mark inthis field.Note : This field is not applicable for servicereceiver and input service distributor.

Note: While generating ST-3 report for service provider or service receiver Input ServiceDistributor field should be unchecked in Location card or Company Information master,and Input Service Distributor field should be checked in location card or companyinformation master if the report is being generated for input service distributor for theservice tax registration number chosen in report request form.

ST-3 return for Service Provider and Service Receiver In case of ST PaymentPeriod is Monthly.

Generate Form ST-3 for Service Tax Registration No. “RED118910100578” and forthe period “April to September”.

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Fill in the following fields to generate the report:

Service Tax Reg. No. : RED118910100578 Half Yearly Period : Apr-Sept Year: 2007 Place Submitted : New Delhi Date Submitted : 25-10-07 Whether providing any exempted or non taxable service (‘Y/N’) : Place a check mark Whether manufacturing any exempted goods (‘Y/N’): Place a check mark


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The program will generate the ST-3 report with all relevant information.

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ST-3 return for Input Service Distributor In case of ST Payment Period is Monthly.

Generate Form ST-3 for Service Tax Registration No. “SLV118910100578” and forthe period “April to September”.

Fill in the following fields to generate the report:

Service Tax Reg. No. : SLV118910100578 Half Yearly Period : Apr-Sept

Year: 2007 Place Submitted : New Delhi Date Submitted : 25-10-07 Whether providing any exempted or non taxable service (‘Y/N’): Uncheck Whether manufacturing any exempted goods (‘Y/N’): Uncheck


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The program will generate the ST-3 report with all relevant information.

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Filling of ST-3

Navigation: Financial Management → General Ledger → Setup → Service Tax → ServiceTax Return period

Enter the filling date on which you have submitted the ST-3 return to governmentauthorities after generating ST-3.

The program will not consider any payment liability paid after the actual return filed datein the same return period.

Example:In ST-3 return for registration no. RED118910100578, the unpaid liability amount isRs. 6180 which is shown in Sr. No. 4C of ST-3 for the period April-Sept 2007-08. After filling of the ST-3 return the unpaid liability of Rs. 6180 has been paid, the same amountwill be shown in Sr. No. 4A of ST-3 for the period Oct-March 2007-08.

Fields Description of ST-3 report

Sr. No. Fields Description

Financial Year This field gets the value fromYear field available in optionstab in the Report Requestform.For Example: Value entered in Year field is2007, and then the programwill display it in the reportagainst Financial Year field

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“2007-08 ”.

For the period (Please tickthe appropriate period)

The program will place acheck mark on the basis of the period defined in “Half Yearly Period” field in requestform.If Half Yearly Period is chosenas Apr-Sept, then April-September field in the reportwill be ticked and if Half Yearly Period is chosen asOct-March, then October-March field in the report willbe ticked.

1A. Has the Assess Opted tooperate as large taxpayer

This field gets the checkmarkif the Large Tax Payer field incompany information master is checked.

1B. If reply to column1A is yes,name of large taxpayer unit(opted for (name of city)

This field gets the value onthe basis of value selected inLarge Tax Payer City field inCompany Information Master.

2A. Name of the Assessee This field populates the sameName which has beenentered in the Name field inCompany Information master.

2B. STC No This field populates the samenumber which has beenchosen in the Service TaxReg. No. field in the ReportRequest form whilegenerating the report.

2C. Premises code No This field populates the samecode number which has beenentered in the Premises codeNo. field in Service TaxRegistration Nos. setup.

2D. Constitution of Assessee The program will place acheckmark on the basis of constitution chosen inCompany Status field inCompany Information Master.Categories in the report are :

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Individual/Proprietary;Partnership; RegisteredPublic Ltd. Company;Registered Private Ltd.Company; Registered Trust;Society/Co-op Society;Others.

Fields Description of Sr. No. 3 “Computation of Service Tax” section in the report:

Note: The program will populate the values in this section for Service Provider and Service receiver and will not populate any value for input service distributor. Also program will repeat this section for every category (Service Tax Group) of taxable service on which service tax is payable.

Sr. No. Fields Description3A1. Name of Taxable service This field shows the

description of service taxgroup code.

3A2. Assessee is liable to payservice tax on this taxableservice as

The program will place acheckmark on the basis of category chosen in ‘Liable topay Service Tax as’ field inST Groups/ST RegistrationNo. form. If ‘Liable to payService Tax as’ is chosen asService Provider, then ‘aService Provider’ field in thereport will be ticked and if ‘Liable to pay Service Tax as’is chosen as ServiceReceiver, then ‘a Servicereceiver liable to makepayment of service tax’ field inthe report will be ticked.

3B. Sub clause No of clause(105)of section 65

This field populates the samevalue which has been enteredin the Sub-Clause No. field inService Tax Groups setup.

3C1. Has the assessee availedbenefit of any exemptionnotification(Y/N)

This field will show the valueas “Y” on the basis of valueentered in Notification No.field with Type as “Exemption”in Service Notification Nos.form. If there is no value inNotification No. field then

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Sr. No. Fields Descriptionvalue will be “N” in this filed.

3C2. If reply to column”C1” is yes,please furnish notificationNos

This field populates the samenotification number which hasbeen entered in theNotification No. field inService Notification Nos.form.If 3C1 field is N then this fieldwill be blank.

3D. If abatement is claimed asper notification No1/2006,please furnish serialnumber in the notificationunder which suchabatement is claimed

This field will populate thesame Sr. No. which has beenentered in Notification Sr. No.field with Type as“Abatement” in ServiceNotification Nos. form.

3E1. Whether provisionallyassessed(Y/N)

This field will show the valueas “N”.

3E2. Prov. assessment order no(if any)

This field will be blank in caseSr. No. 3E1 is “N”.

3F (I) Service Tax payable The program will furnish thedetails under this section onthe basis of Service taxpayment period. If the periodis monthly then the details willbe furnished month wise, for example: Apr, May, June,July, Aug, and Sept. If theperiod is Quarterly then thedetails will be furnishedquarter wise means: Apr-Jun,Jul-Sep.

3F (I) (a) Gross amountreceived/(paid#) in money

(i) against service provided This field shows the grossamount received fromcustomer on which service taxhas been calculated andservice tax is exempt/notpayable. Amount paid toVendor on which service taxhas been calculated in caseof GTA.

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Sr. No. Fields Description

(ii) in advance for service tobe provided

This field shows the grossamount of advance receivedfrom customer on whichservice tax has beencalculated and service tax isexempt/not payable.

3F (I) (b) Money equivalent of considerationsreceived/(paid#) in a formother than money

This field is not been handledby the program.

3F (I) © Value on which service taxis exempt/not payable(i) Amount received againstexport service

This field shows the amountreceived from customer against export services onwhich service tax is notpayable.

(ii) Amount received towardsexempted service (other than export of service)

This field shows the amountreceived from customer against exempted services onwhich service tax is exempt.

(iii) Amount receivedas/(paid to) pure agent

This field shows the amountreceived from customer aspure agent on which servicetax is not payable.

3F (I) (d) Abatement amount claimed This field shows the amountof Abatement which has beencalculated by the program onthe basis of abatement %entered in the Service TaxSetup.

3F (I) (e) Taxable value=(a+b) minus(c+d)

This field shows the taxablevalue after subtracting thesum of Sr. No. 3F (I) © & (d) from the sum of Sr. No. 3F (I)(a) & (b) .

3F (I) (f) Service tax rate wisebreakup of taxablevalue=(e)(i) Value on which servicetax is payable@5%

This field shows the taxablevalue on which service taxhas been calculated @ 5%.

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Sr. No. Fields Description(ii) Value on which servicetax is payable@8%


(iii) Value on which servicetax is payable@10%


(iv) Value on which servicetax is payable@12%


(v) Other rate, if any, (pleasespecify)

This field shows the taxablevalue on which service taxhas been calculated withsome other rate.

3F (I) (g) Service Tax Payable This field shows the sum of the amounts of service taxpayable which has beencalculated on taxable value.(5% of f(i) + 8% of f(ii) + 10%of f(iii) + 12% of f(iv) + X%of f(v)).

3F (I) (h) Education Cess payable This field shows the amountof Education Cess payablewhich has been calculated onService Tax Payable.(@ 2% of Service Tax).

3F (I) (i) Secondary and higher education Cess payable

This field shows the amountof Secondary and higher education Cess payablewhich has been calculated onService Tax Payable.(@ 1% of Service Tax).

3F (II) Taxable amount charged The program will furnish thedetails under this section onthe basis of Service taxpayment period. If the periodis monthly then the details willbe furnished month wise for example: Apr, May, June,July, Aug, and Sept. If theperiod is Quarterly then thedetails will be furnishedquarter wise means; Apr-Jun,

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Sr. No. Fields DescriptionJul-Sep.

3F (II) (j) Gross amount for whichbills/invoices/challans areissued relating to serviceprovided/to be provided(including export of serviceand exempted service)

This field shows the grossamount received / notreceived from customer onwhich service tax has beencalculated and service tax isexempt/not payable. Amountpaid/not paid to Vendor onwhich service tax has beencalculated in case of GTA.

3F (II) (k) Money equivalent of other consideration charged if anyin a form of other thanmoney

This field is not handled bythe program.

3F (II) (l) Amount charged againstexport service provided/tobe provided

This field shows the amountreceived/not received fromcustomer against exportservices on which service taxis not payable.

3F (II) (m) Amount charged for exempted servicesprovided/to beprovided(other than exportof service)

This field shows the amountreceived/not received fromcustomer against exemptedservices on which service taxis exempt.

3F (II) (n) Amount charged as pure Agent

This field shows the amountreceived/not received fromcustomer as pure agent onwhich service tax is notpayable.

3F (II) (o) Amount claimed asabatement

This field shows the amountof Abatement which has beencalculated by the program onthe basis of abatement %entered in the Service TaxSetup.

3F (II) (p) Net taxable amountcharged=(J+k) minus (l+m+n+o)

This field shows the Nettaxable value after subtractingthe sum of Sr. No. 3F (II) (j) &(k) from the sum of Sr. No. 3F(II) (l), (m), (n) & (o) .

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Fields Description of Sr. No. 4A “Service Tax, education Cess and other amountspaid” section in the report:

Note: The program will populate the values in this section for the person who is liable to pay service tax and will not populate any value for input service distributor.

Sr. No. Fields Description4A (I) Service Tax, education Cess

and other amounts paidThe program will furnish thedetails under this section onthe basis of Service taxpayment period.

If the period is monthly thenthe details will be furnishedmonth wise for example: Apr,May, June, July, Aug, andSept. If the period is Quarterlythen the details will befurnished quarter wisemeans: Apr-Jun, Jul-Sep.

4A (I) (a) Service Tax paid(i) in cash This field shows the amount

of service tax which has beenpaid to the governmentauthorities in Cash/Chequethrough Service Tax payment

journal.

(ii) by CENVAT credit This field shows the amountof service tax credit andExcise credit which has beenutilized against service taxliability through Service Taxpayment journal.

(iii) by adjustment of excessamount paid earlier andadjusted in this period under rule 6(3) of ST Rules


(iv) by adjustment of excessamount paid earlier andadjusted in this period under rule 6(4A) of ST Rules


4A (I) (b) Education Cess paid(i) in cash This field shows the amount

of Education Cess which hasbeen paid to the governmentauthorities in Cash/Cheque

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Sr. No. Fields Descriptionthrough Service Tax payment

journal.

(ii) by CENVAT credit This field shows the amountof service tax education Cesscredit and Excise educationCess credit which has beenutilized against service taxeducation Cess liabilitythrough Service Tax payment

journal.





4A (I) (c) Secondary and highereducation Cess paid(i) in cash This field shows the amount

of Secondary and higher Education Cess which hasbeen paid to the governmentauthorities in Cash/Chequethrough Service Tax payment

journal.

(ii) by CENVAT credit This field shows the amountof service tax secondary andhigher education Cess creditand Excise secondary andhigher education Cess creditwhich has been utilizedagainst service tax secondaryand higher education Cessliability through Service Taxpayment journal.





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Sr. No. Fields Description4A (I) (d) Other amounts paid

(i) Arrears of revenue paid incash

This field shows the amountof arrears of service taxliability which has been paidto the government authoritiesin Cash/Cheque throughService Tax payment journal.

(ii) Arrears of revenue paid bycredit

This field shows the amountof service tax credit andExcise credit which has beenutilized against liability of service tax arrears throughService Tax payment journal.

(iii) Arrears of education Cesspaid in cash

This field shows the amountof arrears of service taxeCess liability which hasbeen paid to the governmentauthorities in Cash/Chequethrough Service Tax payment

journal.

(iv) Arrears of education Cesspaid by credit

This field shows the amountof service tax eCess creditand Excise eCess creditwhich has been utilizedagainst liability of service taxeCess arrears throughService Tax payment journal.

(v) Arrears of Sec & higher education Cess paid in cash

This field shows the amountof arrears of service tax SHECess liability which has beenpaid to the governmentauthorities in Cash/Chequethrough Service Tax payment

journal.

(vi) Arrears of Sec & higher education Cess paid by credit

This field shows the amountof service tax SHE Cesscredit and Excise SHE Cesscredit which has been utilizedagainst liability of service taxSHE Cess arrears throughService Tax payment journal.

(vii) Interest paid This field shows the amountof Interest which has been

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Sr. No. Fields Descriptionpaid to the governmentauthorities in Cash/Chequethrough Service Tax payment

journal.

(viii) Penalty paid This field shows the amountof Penalty which has beenpaid to the governmentauthorities in Cash/Chequethrough Service Tax payment

journal.

(xi) Section 73A amount paid This field shows the amountwhich has been paid under sec. 73A to the governmentauthorities in Cash/Chequethrough Service Tax payment

journal.

(x) Any other amount (pleasespecify)

This field shows the amountwhich has been paid as other amount to the governmentauthorities in Cash/Chequethrough Service Tax payment

journal.

4A (II) Details of Challan The program will furnish thedetails under this section onthe basis of Service taxpayment period. If the periodis monthly then the details willbe furnished month wise; for example: Apr, May, June,July, Aug, and Sept. If theperiod is Quarterly then thedetails will be furnishedquarter wise, means Apr-Jun,Jul-Sep.

4A (II) (a) Challan Nos. This field shows the challanno’s that have been enteredthrough update ChallanDetails form.

4A (II) (b) Challans Date This field shows the challandates that have been enteredthrough update ChallanDetails form.

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Fields Description of Sr. No. 4B “Source documents details for entries at column4A(I)(a) (iii), 4A(I)(a) (iv), 4A(I)(b) (iii), 4A(I)(b) (iv), 4A(I)(c) (iii), 4A(I)(d) (i) to (vii)”section in the report:

Fields DescriptionSr.No. This field shows the serial number which is

auto generated by the program.

Month/Quarter This field shows the Month or Quarter for which you have entered the Sourcedocument number and date in ST3 sourcedocument details form available in Servicetax payment form.

Source document No./Period This filed shows the same value which hasbeen entered in Source Document No.field in ST3 source document details form.

Source documents date This filed shows the same value which hasbeen entered in Source Document Datefield in ST3 source document details form.

Fields Description of Sr. No. 4C in the report:

Fields DescriptionDetails of amount of service tax payablebut not paid as on the last day of theperiod for which return is filed

This field shows the total amount of Service Tax, eCess and SHE Cess liabilitythat have been unpaid on the last day of the period for which return is filed.

Fields Description of Sr. No. 5 “Details of input stage CENVAT credit” section inthe report:

Note: The program will populate the values in this section for Service Provider and will not populate any value for Service receiver and input service distributor.

Sr. No. Fields Description5A Whether the assessee

providing exempted/nontaxable service orexempted goods

5A (a) Whether providing anyexempted or non taxable

This field will shows the valueas “Y” on the basis of check

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service (‘Y/N’) mark in “Whether providingany exempted or non taxableservice (‘Y/N’)” field availablein the Report Request formwhile generating the report.This field is applicable for onlyservice provider.

5A (b) Whether manufacturing anyexempted goods (‘Y/N’)

This field will shows the valueas “Y” on the basis of checkmark in “Whether manufacturing any exemptedgoods (‘Y/N’)” field availablein the Report Request formwhile generating the report.This field is applicable for onlyservice provider.

5A © If any one of the above isyes, whether maintainingseparate account for receiptor consumption of inputservice and input goods(refer to rule 6(2) of CENVAT credit Rule, 2004)

This field shows the value as“Y” if any one of the field from(a) or (b) is “Y”. This field isapplicable for only serviceprovider.

Fields Description of Sr. No. 5B “CENVAT Credit taken and utilized” section in thereport:

Sr. No. Fields Description5B (I) CENVAT Credit of Service

tax and Central Exciseduty

The program will furnish thedetails under this section onthe basis of Service taxpayment period. If the periodis monthly then the details willbe furnished month wise, for example: Apr, May, June,July, Aug, and Sept. If theperiod is Quarterly then thedetails will be furnishedquarter wise means: Apr-Jun,Jul-Sep.

5B (a) Opening balance This field shows the openingbalance of CENVAT credit of service tax and Central exciseduty as on date.

5B (b) Credit taken(i) On inputs This field shows the amount

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of CENVAT credit of CentralExcise duty onpurchase/transfer receipts of inputs.

(ii) On capital goods This field shows the amountof CENVAT credit of CentralExcise duty onpurchase/transfer receipts of capital goods.

(iii) On input servicesreceived directly

This field shows the amountof CENVAT credit of Servicetax on input services received.

(iv) As received from inputservice distributor

This field shows the amountof CENVAT credit of servicetax which has been receivedfrom input service distributor.

(v) from inter unit transfer bya LTU

This field shows the amountof CENVAT credit of Exciseduty which has been receivedfrom inter unit transfer byLTU.If Central STC Applicable fieldis true in company informationmaster, then the program willshow the amount of CENVATcredit of Excise duty whichhas been received from inter unit transfer by LTU in Sr. No.5B (I) (b) (i) or (ii) instead of showing it in this field.

Total Credittake=(i+ii+iii+iv+v)

This field shows the sum of Sr. No. 5B (I) (b) (i), (ii), (iii),(iv) and (v).

5B (c) Credit utilized(i) For payment of servicetax

This field shows the amountof CENVAT credit of Servicetax and CENVAT credit of Excise duty which has beenutilized against service taxliability.

(ii) For payment of education Cess on taxableservice


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(iii) For payment of excise or any other duty

This field shows the amountof CENVAT credit of Servicetax and CENVAT credit of Excise duty which has beenutilized against Excise dutyliability.

Also this field will show theamount of excise duty whichhas been debited in the RGregisters after postingPurchase Credit Memo andReturn order.

Amount in this field will bereduced with respect to theamounts available in field Sr.No. 5 B (I) © (iv) and (v).

(iv) Towards clearance of input goods and capitalgoods removed as such

This field shows the sameamount which has beenentered in ST3 Removed asSuch/LTU Dtl. form in For Remover as such field.

(v) Towards inter unittransfer of LTU

This field shows the sameamount which has beenentered in ST3 Removed asSuch/LTU Dtl Form in FromITU for LTU field. If theCentral STC Applicable fieldis checked in companyinformation master then thisfield will be blank.

Total Credit utilized=(i+ii+iii+iv+v)

This field shows the sum of Sr. No. 5B (I) (c) (i), (ii), (iii),(iv) and (v).

5B (I) (d) Closing Balance of CENVAT Credit= (a+b-c)

This field shows the closingbalance after subtracting Sr.No. 5B (I) © from the sum of Sr. No. 5b (I) (a) and (b).

5B (II) CENVAT credit ofEducation Cess andSecondary and higherEducation Cess

The program will furnish thedetails under this section onthe basis of Service taxpayment period. If the periodis monthly then the details willbe furnished month wise for example: Apr, May, June,July, Aug, and Sept. If the

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period is Quarterly then thedetails will be furnishedquarter wise means; Apr-Jun,Jul-Sep.

5B (II) (a) Opening balance This field shows the openingbalance of CENVAT credit of service tax eCess and SHECess and Central excise dutyeCess and SHE Cess as ondate.

5B (II) (b) Credit of education Cessand secondary and highereducation Cess taken(i) On inputs This field shows the amount

of CENVAT credit of CentralExcise duty ECESS and SHECESS on purchase/transfer receipts of inputs.

(ii) on capital goods This field shows the amountof CENVAT credit of CentralExcise duty ECESS and SHECESS on purchase/transfer receipts of capital goods.

(iii) On inputs servicesreceived directly

This field shows the amountof CENVAT credit of Servicetax ECESS and SHE CESSon input services received.

(iv) As received from inputservice distributor

This field shows the amountof CENVAT credit of servicetax ECESS and SHE CESSwhich has been received frominput service distributor.

(v) From inter unit transfer by a LTU

This field shows the amountof CENVAT credit of Exciseduty ECESS and SHE CESSwhich has been received frominter unit transfer by LTU.If Central STC Applicable fieldis true in company informationmaster, then the program willshow the amount of CENVATcredit of Excise duty ECESSand SHE CESS which hasbeen received from inter unit

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transfer by LTU in Sr. No. 5B(II) (b) (i) or (ii) instead of showing it in this field.

Total credit of educationCess and secondary andhigher education Cesstaken= (i+ii+iii+iv+v)

This field shows the sum of Sr. No. 5B (II) (b) (i), (ii), (iii),(iv) and (v).

5B (II) © Credit of education Cessand secondary and highereducation Cess utilized(i) For payment of educationCess and secondary andhigher education Cess onservices

This field shows the amountof CENVAT credit of Servicetax ECESS and SHE CESSand CENVAT credit of Exciseduty ECESS and SHE CESSwhich has been utilizedagainst service tax ECESSand SHE CESS liability.

(ii) For payment of education Cess andsecondary and higher education Cess on goods

This field shows the amountof CENVAT credit of Servicetax ECESS and SHE CESSand CENVAT credit of Exciseduty ECESS and SHE CESSwhich has been utilizedagainst Excise duty ECESSand SHE CESS liability.

Also this field will show theamount of excise duty ECESSand SHE CESS which hasbeen debited in the RGregisters after postingPurchase Credit Memo andReturn order.

Amount in this field will bereduced with respect to theamounts available in field Sr.No. 5 B (II) © (iii) and (iv).

(iii) Towards payment of education Cess andsecondary and higher education Cess onclearance of input goodsand capital goods removedas such

This field shows the sameamount which has beenentered in ST3 Removed asSuch/LTU Dtl. Form in for removed as such (ECESS)and for removed as such(SHE CESS) fields.

(iv) Towards inter unittransfer of LTU

This field shows the sameamount which has been

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entered in ST3 Removed asSuch/LTU Dtl Form in FromITU for LTU (ECESS) andfrom ITU for LTU (SHECESS) fields. If the CentralSTC Applicable field ischecked in companyinformation master then thisfield will be blank.

Total credit of educationCess and secondary andhigher education Cessutilized= (i+ii+iii+iv)

This field shows the sum of Sr. No. 5B (II) (c) (i), (ii), (iii)and (iv).

5B (II) (d) Closing Balance of Education Cess andsecondary and higher education Cess= (a+b-c)

This field shows the closingbalance after subtracting Sr.No. 5B (II) © from the sum of Sr. No. 5b (II) (a) and (b).

Fields Description of Sr. No. 6 “Credit details for input service distributor” sectionin the report:

Note: The program will populate the values in this section only for Input Service Distributor.

Sr. No. Fields Description6 (I) CENVAT credit of service

tax and Central Exciseduty

The program will furnish thedetails under this section onthe basis of Service taxpayment period. If the periodis monthly then the details willbe furnished month wise for example: Apr, May, June,July, Aug, and Sept. If theperiod is Quarterly then thedetails will be furnishedquarter wise means: Apr-Jun,Jul-Sep.

6 (I) (a) Opening balance of CENVAT Credit

This field shows the openingbalance of CENVAT credit of service tax as on date.

6 (I) (b) Credit taken (for distribution)on inputs service

This field shows the amountof CENVAT credit of Servicetax taken for distribution onpurchase of input services.

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6 (I) (c) Credit distributed This field shows the amountof CENVAT credit of servicetax which has been distributedto other units through ServiceTax Distribution form.

6 (I) (d) Credit not eligible for distribution

This field shows the amountof CENVAT credit of servicetax which has been loaded onService account throughService tax distribution form.

6 (I) (e) Closing balance This field shows the closingbalance after subtracting thesum of Sr. No. 6 (I) © and (d)from the sum of Sr. No. 6 (I)(a) and (b).

6 (II) CENVAT credit ofeducation Cess andsecondary and highereducation Cess Credit

The program will furnish thedetails under this section onthe basis of Service taxpayment period. If the periodis monthly then the details willbe furnished month wise for example: Apr, May, June,July, Aug, and Sept. If theperiod is Quarterly then thedetails will be furnishedquarter wise means: Apr-Jun,Jul-Sep.

6 (II) (a) Opening balance of education Cess andsecondary and higher education Cess Credit

This field shows the openingbalance of CENVAT credit of service tax ECESS and SHECESS as on date.

6 (II) (b) Credit of education Cessand secondary and higher education Cess taken (for distribution) on input service

This field shows the amountof CENVAT credit of Servicetax ECESS and SHE CESStaken for distribution onpurchase of input services.

6 (II) © Credit of education Cessand secondary and higher education Cess distributed

This field shows the amountof CENVAT credit of servicetax ECESS and SHE CESSwhich has been distributed toother units through ServiceTax Distribution form.

6 (II) (d) Credit of education Cess This field shows the amount

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and secondary and higher education Cess not eligiblefor distribution

of CENVAT credit of servicetax ECESS and SHE CESSwhich has been loaded onService account throughService tax distribution form.

6 (II) (e) Closing balance This field shows the closingbalance after subtracting thesum of Sr. No. 6 (II) © and (d)from the sum of Sr. No. 6 (II)(a) and (b).

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Microsoft ® Business Solutions–Navision ® 4.0 - Excise Invoice

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Detailed Setup...................................................................................................3 Comprehensive Functionality ............................................................................3 Report ...............................................................................................................4

Setup Required.....................................................................................................5 Location Card....................................................................................................5 Sales Order .......................................................................................................6

Excise Invoice.......................................................................................................8 Sales Invoice with excise tax, sales tax, TCS and service tax ..........................8

Viewing the Posted Transaction ..................................................................13 Supplementary Excise Invoice ........................................................................25

Viewing the Posted Transaction ..................................................................31 CVD and ADC VAT Transaction......................................................................35

Viewing the Posted Transaction ..................................................................38 Sales Transaction with foreign currency..........................................................41

Viewing the Posted Transaction ..................................................................43 Sales invoice, where Direct Debit to PLA/RG functionality is used..................47

Viewing the Posted Transaction ..................................................................54 Excise Invoice with Goods Removed as Such ................................................56

Viewing the Posted Transaction ..................................................................58 Excise Transfer Invoice.......................................................................................62

Excise Transfer invoice with excise duty, other taxes and other charges........62 Viewing the Posted Transaction ..................................................................66

Excise Transfer invoice with CVD/ADC VAT...................................................70 Viewing the Posted Transaction ..................................................................71

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This feature is developed for the organization, engaged in manufacturing activity and inneed of Excise Invoice for Sales Transaction and Stock Transfer.

An invoice is the document under cover of which excisable goods are to be cleared bythe manufacturer / trader of excisable goods. This document also indicates theassessment of the goods to duty.

The program generates the following reports under this functionality:• Excise Invoice Report• Excise Invoice Transfer Report

Detailed Setup

Excise Invoice

On the Sales Order header fill in details of transportation of goods.

Excise Invoice (Transfer)

On the Transfer Order header fill in details of transportation of goods.


Following comprehensive functionalities are covered under the Excise Invoicefunctionality:

• Recording of details of transportation of goods.• Generation of Excise Invoice report• Generation of Excise Invoice (Transfer) report

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Report

This report contains the details of excisable goods; sold to the customer. As per rule 11(2) of the Central Excise Rule 2002; excisable goods can not be removed from the

factory / ware house without an invoice; signed by the owner of the factory or by hisauthorized agent.

Following information needed to be specified in the Invoice as per Rule 11(2) ofCentral Excise Rule 2002:

• Serially number • Excise registration number • Name of the consignee • Description of goods • Classification of goods (Tariff heading) • Time and date of removal • Mode of transport • Vehicle registration number • Rate of duty • Quantity and value of the goods • Duty amount.

The program generates the Excise Invoice report and Excise Invoice (Transfer) report.

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Setup Required

Location Card



Field Description

C.E. Range Enter the number of the Central ExciseRange under jurisdiction of which, thelocation is falling.

C.E. Commissionerate Enter the name of the Central ExciseCommissionerate under jurisdiction of which, the location is falling.

C.E. Division Enter the name of the Central ExciseDivision under jurisdiction of which, thelocation is falling.

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Field Description

L.S.T. No. Enter the Local Sales Tax (LST) number,assigned by the Sales Tax Authority.

C.S.T No. Enter the Central Sales Tax (CST)number, assigned by the Sales Tax

Authority.

Sales Order


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Field Description

Date of RemovalDefine the date of removal of goods fromthe factory in this field .

Time of RemovalDefine the time of removal of goods fromthe factory in this field .

LR/RR No. Define the Lorry Receipt /Railway ReceiptNumber (LR/RR No.) in this field.

LR/RR Date Define the Lorry Receipt/Railway ReceiptDate (LR/RR Date) in this field.

Vehicle No. Define the number of the vehicle, which isused to send the goods in this field.

Mode of Transport Define the mode of transport of goods inthis field.

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Excise Invoice

Following types of transactions are considered to describe the functionality:

1. Sales Invoice with excise duty, sales tax ,TCS and service tax2. Supplementary excise invoice3. CVD and ADC VAT transaction4. Sales transaction with foreign currency5. Sales invoice, where Direct Debit to PLA/RG functionality is used.6. Excise Invoice with Goods Removed as Such

Sales Invoice with excise tax, sales tax, TCS and service tax

Generation of Excise Invoice for Excisable Goods


General Tab

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Others Tab


On the Header:

No: 10000 Posting Date 02/04/07 Structure: STR6 Location Code: BLUE Shipping Agent Code DHL Time of Removal: 3:30 PM

Mode of Transport: ROAD Vehicle No: HR-26 8362 LR/RR No: LR/9743 LR/RR Date: 01/04/07

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On the first line:

Type: Item No.: 1000 Description: Bicycle Quantity: 10 Unit Price: 4000 Line Discount %: 10 TCS Nature of Collection: A

On the second line:

Type: Item No. 1110 Description: Bicycle Quantity 20 Unit Price 400 Line Discount %: 20 TCS Nature of Collection: A

On the third line:

Type: G/L Account No. 8410 Description: Advertising Quantity 1 Unit Price 10,000.00

TCS Nature of Collection: A

Calculate Structure


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Fill in the Inv. Discount Amount as 2000

Close the window

Open the Sales Line – Zoom window for first sales Order line

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The program populates 32.48 as excise effective duty rate.

The program calculates the value as follows:

Dutycomponent

Calculation Type CalculationFormula

Rate EffectiveRate

BED Excise % LINE AMOUNT 16.00 16.00SED Excise % LINE AMOUNT 2.00 2.00AED(GSI) Excise % LINE AMOUNT 2.00 2.00AED(TTA) Excise % LINE AMOUNT 2.00 2.00SAED Excise % LINE AMOUNT 2.00 2.00ADE Excise % LINE AMOUNT 2.00 2.00ADET Excise % LINE AMOUNT 2.00 2.00CESS Excise % LINE AMOUNT 2.00 2.00NCCD Excise % LINE AMOUNT 2.00 2.00eCess Excise % BED 2.00 0.32SHE Cess Excise % BED 1.00 0.16

Effective Rate of Excise 32.48


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Open Sales Invoice Line – Zoom window for first Sales Invoice line

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The program populates 32.48 as excise effective duty rate.

Navigate the sales invoice

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G/L Entry

The program generates the following GL entries

Particulars Dr/Cr AmountCustomer A/C Dr 85002.00Discount A/C Dr 5600.00Discount A/C Dr 2000.00

Advertising A/C Cr 10000.00Sales A/C Cr 48000.00Sales Tax A/C Cr 3840.00Excise Payable A/C Cr 16371.00TCS Payable-A Cr 5711.00Packing Cr 750.00Other Taxes Cr 4500.00Freight Cr 2400.00Service Tax Payable Interim Cr 1030.00

The program calculates excise according to the Excise Posting setup.

The program does not generate excise invoice report for the sales invoice if,

1. Posted Str Order Line Details table does not contain any line for Tax/Charge Type asExcise.

2. The sales invoice is of trading transaction. The program considers sales invoice astrading transaction invoice if Trading field in sales invoice header is checked.

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Note:

1. Service tax registration number will be populated in the invoice only when the servicetax has been calculated in the invoice.

2. Other taxes and charges will be populated in the invoice only when charges or other taxes are calculated in the invoice.

Preview report

Navigation : Posted Sales Invoice → Print menu button → Print Excise Invoice→ preview button

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Note 1:You can post the same transaction from the Sales Invoice.Note 2:Charges, CST/LST /VAT, TCS, Service tax amount is calculated as zero value than thetext of charges, CST/LST/VAT ,Service tax will not get printed in the excise invoice.

Scenario: Goods are dispatching directly from the manufacturer’s place to thebuyer’s place instead of dispatching the goods from the dealer’s premises.

Goods can be dispatched directly from the manufacturer to the buyer. This dispatch ispermitted only if the whole consignment is dispatched from the manufacturer to theultimate buyer. In such a case, dealer will not issue CENVAT Invoice to the buyer. Buyer can take CENVAT credit on the basis of the manufacturer invoice, in case the buyer name is mentioned in the manufacturer invoice as consignee.

Excise Invoice Report

The report populates values as described below:

Values under the Invoice heading

Field Description

Fixed Text The program populates fixed text as,

INVOICEInvoice for removal of exercisable goods from the factory

or ware house on payment of duty (rule 11 of CE(Second amendment) rule 2002)

Assessee Address The program populates values from following informationof assessee1. Name2. Address3. Post Code/City4. State5. Country6. Phone No

7. Fax No

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The program populates following tax details of assesseeField Description

E.C.C No The program populates ECC number in this field.The program copies value from E.C.C. No field inthe Location Card which is selected on the salesheader. If the Location field on the sales header does not contain value then the program copiesthe value from the E.C.C. No field in theCompany Information.

C.E. Division The program populates C.E. Division from in thisfield. The program copies value from the C.E.Division field in the Location Card which isselected on the sales header. If the Location fieldon the sales header does not contain value thenthe program copies the value from the C.E.Division field in the Company Information.

Range The program populates Range in this field. Theprogram copies value from the Range field in theLocation Card which is selected on the salesheader. If the Location field on the sales header does not contain value then the program copiesvalue from Range field in the CompanyInformation.

Commissionerate The program populates Commissionerate in thisfield. The program copies value from theCommissionerate field in the Location Cardwhich is selected on the sales header. If theLocation field on the sales header does notcontain value then the program copies valuefrom the Commissionerate field in the CompanyInformation.

TIN No The program populates TIN No in this field. The

program copies value from the TIN No field in theLocation Card which is selected on the salesheader. If the Location field on the sales header does not contain value then the program copiesvalue from the TIN No field in the CompanyInformation.

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CST No The program populates CST No in this field. The

program copies value from the CST No field inthe Location Card which is selected on the salesheader. If the Location field on the sales header does not contain value then the program copiesvalue from the CST No field in the CompanyInformation.

LST No The program populates LST No in this field. Theprogram copies value from the LST No field inthe Location Card which is selected on the salesheader. If the Location field on the Sales header does not contain value then the program copiesvalue from the LST No field in the CompanyInformation.

The program populates following values on the Invoice Detail heading

Field Description

Invoice No The program populates the invoice number inthis field. The program copies value in this fieldfrom the No field on the Sales Invoice Header.

Date and Time of Removal The program populates the date and time of

removal in this field. The program copies valuesin these fields from the Posting Date and Time of Removal field respectively on the Sales InvoiceHeader.

External Document No The program populates the external documentnumber in this field. The program copies value inthis field from the External Document No field onthe Sales Invoice Header.

The program populates following values in Name and Address of the Customer heading

Field Description

Customer Name The program copies value for customer name from the Bill-to Customer Name fieldon the Sales Invoice Header.

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Customer Address The program copies value for customer

address from the Bill-to Address and Bill-to Address 2 fields on the Sales InvoiceHeader.

Customer City The program copies value for customer city from the Bill-to City field on the SalesInvoice Header

Customer State The program copies value for customer state from the Bill to Customer State fieldon the Sales Invoice Header

Customer Country The program copies value for customer country on the basis of Bill-to CountryCode and then the program copies value inName field against country code.

Customer Phone No The program copies value for customer country on the basis of Bill-to CountryCode and then the program copies value inName field against country code.

Customer Fax No The program copies value in this field fromFax No field in Customer card.

Email The program copies value in this field fromthe E-mail field in the Customer card.

TIN No The program copies value in this field fromthe TIN No field in the Customer card.

CST No The program copies value in this field fromthe Customer card.

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UOM This column contains the unit of

measurement.

Assessable Value (Rs) This column contains the assessable

value. Assessable Value will not get populated if,

• In Excise Posting Setup card BEDCalculation type is Amount/Unit

• In Excise Posting Setup card BEDCalculation type is Excise%+Amount/Unit

• In Excise Posting Setup card BEDCalculation Formula is LINE AMOUNTand Line Discount % field in Sales linecontains value and / or invoice discountis calculated in Sales Order/Invoice

CETSH This column contains the tariff heading of item sold.

Excise Duty Rate This column contains the effective exciseduty rate of item sold.Value in Excise Duty Rate will not getpopulated if,• In Excise Posting Setup card BED

Calculation type is Amount/Unit• In Excise Posting Setup card BED

Calculation type is Excise%+Amount/Unit

• In Excise Posting Setup card BED Calculation Formula is LINE AMOUNTand Line Discount % field in Sales linecontains value and / or invoice discountis calculated in Sales Order/Invoice

Central Excise Duty (Rs) This column contains the excise duty onitem sold.

CST/VAT/LST% This column contains the central sales taxrate or value added tax rate or local salestax rate which is applicable on the item.

TCS % This column contains the applicable taxcollected at source rate on invoice line.

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Unit Price (Rs) This column contains the applicable unit

price per unit of item.

Line Amount (Rs) This column contains the line amount onitem sold.

Other fields in Excise Invoice Report

Field Description

Total This field contains the total of values inLine Amount (Rs) column.

Less Invoice Discount This field contains the total invoicediscount on all items.

Total INR Excl. Taxes This field contains the amount calculatedby deducting Less Invoice Discountamount from Total amount.

Excise Amt. This field contains the total excise duty oninvoice excluding excise eCess and exciseSHECess amount.

Excise eCess Amt. This field contains the total excise eCessamount.

Excise SHECess Amt. This field contains the total exciseSHECess amount.

CST/VAT/LST Amount This field contains the total central salestax or value added tax or local sales taxapplicable on invoice.

Other Taxes This subsection contains the other taxeson invoice for example Octroi.

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Charges This subsection contains the Charges in

invoice for example Packing, Freight.

Total INR Incl. Taxes This field contains the total invoice amountincluding taxes.

Amount in Words This field contains the amount in words,populated in Total INR Incl. Taxes field.

Total Assessable Value This field contains the total assessablevalue of items.

Mode of Transport This field contains the mode of transport.The program copies value in this field fromMode of Transport field from the salesinvoice header.

Transporter Name This field contains the transporter name.The program copies value in this field fromthe Name field in the Shipping tableagainst Code which is in the Shipping

Agent Code field on the ales invoiceheader.

LR No and Date This field contains the LR/RR number anddate.

Supplementary Excise Invoice

Generation of Supplementary Excise Invoice for Excisable Goods


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On the Header:

No: 10000 Posting Date 01/04/08 Structure: STR6 Location Code: BLUE Shipping Agent Code DHL Time of Removal: 10:10:13 PM

On the first line:

Type: Charge (Item) No.: Supplementary Quantity: 1 Unit Price: 10000 Supplementary Yes Source Document Type Posted Invoice Source Document No. 103052

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Open Item charge assignment window by clicking on Line menu button, ItemCharge Assignment menu item

Open Sales Shipment Lines window by clicking on Functions menu button, GetShipment Lines menu item

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Select Shipment Lines of Source Document, Sales Invoice 103052

Click on OK button

Open Suggest Item Charge Assignment window by clicking on Functions menubutton, Suggest Item Charge Assignment menu item in Item Charge Assignment(Sales) window

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Click on Amount radio button, then Ok button

The program assign charge amount between shipment line proportionatelyaccording to amount

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Close Item Charge Assignment (Sales) window

Calculate Structure Values

View Sales Order Statistics

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Close Sales Order Statistics window

Post the Sales Order

Viewing the Posted TransactionNavigation:Sales & Marketing → History → Navigate

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Particulars Dr/Cr AmountCustomer A/C Dr 13,248.00Sales A/C Cr 10,000.00Excise Payable A/C Cr 3,248.00

Preview report


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Note• For supplementary excise invoice, the program populates text as: Invoice

(Supplementary): as heading.• The program populates the reference posted invoice number. This is the original

sales invoice number against which supplementary invoice is posted.• You can also post the same transaction from the Sales Invoice.

CVD and ADC VAT Transaction


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To calculate excise, fill the fields in the Sales Order window as follows:

On the Header:

No: 10000 Posting Date 02/01/07 Structure: CVD Location Code: BLUE Shipping Agent Code DHL Time of Removal: 4:51:53 AM Mode of Transport Road Vehicle No HR-26 0001 LR/RR No LR/2547 LR/RR Date 01/04/07

On the first line:

Type: Item No.: 1000 Description: Bicycle Quantity: 10 Unit Price: 4000 Line Discount %: 10 CIF Amount 2000 BCD Amount 1000

On the second line:

Type: Item No. 1110 Description: Bicycle Quantity 20 Unit Price 400 Line Discount %: 20 CIF Amount 200 BCD Amount 100

Calculate Structure


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Statistics

Post Sales Order

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Particulars Dr/Cr AmountCustomer A/C Dr 58122.00Discount A/C Dr 5600.00Sales A/C Cr 48000.00Sales Tax A/C Cr 2236.00Excise Payable A/C Cr 13486.00 Preview report


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Note1. You can also post the same transaction from the Sales Invoice.

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Sales Transaction with foreign currency


To calculate excise, fill the fields in the Sales Order window as follows:

On the Header:

No: 10000 Posting Date 02/01/07 Structure: Excise

Location Code: BLUE Shipping Agent Code DHL Time of Removal: 4:51:53 AM Mode of Transport Road Vehicle No HR-26 0001 LR/RR No LR/2547 LR/RR Date 01/04/07 Relational Exch. Rate 40

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On the first line:

Type: Item No.: 1000 Description: Bicycle Quantity: 10 Unit Price: 100 Line Discount %: 10

On the second line:

Type: Item No. 1110 Description: Bicycle Quantity 20 Unit Price 10 Line Discount %: 20

Calculate Structure


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Statistics

Post Sales Order



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Preview GL Entry


Particulars Dr/Cr AmountCustomer A/C Dr 55324.00Discount A/C Dr 5600.00Sales A/C Cr 48000.00Excise Payable A/C Cr 12924.00 Preview report


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Note:

1. The program generates Excise invoice in LCY where transaction is posted inforeign currency.


Sales invoice, where Direct Debit to PLA/RG functionality is used


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No: 10000 Posting Date 01/04/07 Structure: Excise Location Code: BLUE Shipping Agent Code DHL Time of Removal: 12:17 PM Mode of Transport Road Vehicle No HR-26 0364 LR/RR No LR/2547 LR/RR Date 01/04/07

On the Sales Order first line:

Type: Item No.: 1000 Description: Bicycle Quantity: 10 Unit Price: 4000 Line Discount %: 10 Direct Debit to PLA/RG Yes

On the sales order second line:

Type: Item No. 1110 Description: Bicycle Quantity 20 Unit Price 400 Line Discount %: 20 Direct Debit to PLA/RG Yes



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The program will open the Excise Cenvat Claim form as below:

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The program will open the Excise Cenvat Claim Detail form as below. In this form youcan enter the amount on the RG 23 A tab. Each of the tabs in this window isrepresenting the register of excise.

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Enter the amount on the RG 23 A Part II tab corresponding to the excise duty liabilitycomponent as par the example given below.

RG 23 A BED Amount 6584 RG 23 A AED(TTA) Amount 848 RG 23 A AED(GSI) Amount 848 RG 23 A ADET Amount 848 RG 23 A ADE Amount 848 RG 23 A NCCD Amount 848 RG 23 A SAED Amount 848

RG 23 A SED Amount 848 RG 23 A eCESS Amount 135 RG 23 A SHE CESS Amount 68

The available credit of RG 23 A Part II is utilized. The moment you have entered amountthe Remaining Liability get reduced by credit utilized.

Click on the RG 23 C Part II tab

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Enter the amount on the RG 23 C Part II tab, in the RG 23 C ADC VAT columncorresponding to the excise duty liability component BED Amount as 100.

The available credit of RG 23 C Part II is utilized. The moment you have entered theamount, the Remaining Liability get reduced by the credit utilized.

Click on the PLA tab

Enter the amount on the PLA tab, in the PLA BED Amount column corresponding to theexcise duty liability component BED Amount as 100.

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The available credit of PLA is completely utilized. The moment you have entered amountthe Remaining Liability get reduced to zero.

Thus Duty get settled in the following way:

Duty components DutyPayment

Duty Settled from

CREDIT AVAILABLE - RG 23 APart II

RG 23 CPart II

PLA

BED AMOUNT 6,784.00 6,584.00 100.00 AED(GSI) AMOUNT 848.00 848.00 AED(TTA) AMOUNT 848.00 848.00 AED(TTA) AMOUNT 848.00 848.00SED AMOUNT 848.00 848.00SAED AMOUNT 848.00 848.00CESS AMOUNT 848.00 848.00NCCD AMOUNT 848.00 848.00

ADET AMOUNT 848.00 848.00 ADE AMOUNT 848.00 848.00ECESS AMOUNT 848.00 848.00

ADC VAT AMOUNT - - 100.00SHE CESS AMOUNT 848.00 848.00

Click Escape to come out from the Excise Cenvat Claim Detail window. The ExciseCenvat Claim form will now display as below.

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Click escape to come out of the Excise Cenvat Claim form.



The posted information of sales order will display the entries.

Preview report

Navigation : Posted Sales Invoice → Print menu button → Print Excise Invoice→

preview button

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Note:

1. The program populates the PLA Entry number, where excise payable is directlydebited to PLA.

2. The program populates RG 23A Entry number, where excise payable is directlydebited to RG 23 A.

3. The program populates RG 23C Entry number, where excise payable is directlydebited to RG 23 C.

4. The program populates text “Against C Form” where transaction is against C form.5. You can also post the same transaction from the Sales Invoice.

Excise Invoice with Goods Removed as Such


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No: 10000 Posting Date 01/04/07 Structure: Excise Location Code: BLUE Shipping Agent Code DHL Time of Removal: 6:43 PM Mode of Transport Road Vehicle No HR-26 0364 LR/RR No LR/2547 LR/RR Date 01/04/07

On the Sales Order first line:

Type: Item No.: 1000 Description: Bicycle Quantity: 10 Unit Price: 4000

On the sales order second line:

Type: Item No. 1110 Description: Bicycle Quantity 20 Unit Price 400


The program populates value excise duty in sales lines as,Duty Line 1 Line 2BED Amount 6400.00 1280eCess Amount 128.00 25.60SHE Cess Amount 64.00 12.80

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Change the excise duty amount manual as,

Duty Line 1 Line 2BED Amount 6500.00 1200.00eCess Amount 120.00 24.00SHE Cess Amount 60.00 12.00

Post the Sales Order



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Preview GL entry

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The program generates the following GL entries,

Particulars Dr/Cr AmountCustomer A/c Dr 63,596.00Cost of Retail Sold Dr 3,505.95Cost of Retail Sold Dr 21.00Finished Goods Cr 3,505.95Finished Goods Cr 21.00Sales, Retail - Dom. Cr 48,000.00Excise Payable Account Cr 2,516.00Excise Payable Account Cr 13,080.00

Preview report


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Note

1. The program populates text, Goods Removed As Such for the line where excise dutyhas been manually entered.


Excise Transfer Invoice

You use the Excise Transfer Invoice report to print excise transfer invoice. You can printeither all invoices or selected invoices after they are posted.

The program does not generate excise transfer invoice report for the posted transfer shipment if,• Posted Str Order Line Details table does not contain any line for Tax/Charge Type as

Excise.• Transfer shipment is for captive consumption.• Transfer shipment is from trading location.

Excise Transfer Invoice report populates some fields to be populated only when valuesare in such fields,• ADC/VAT Amount• Other Taxes• Charges

TransactionsFollowing types of transactions are considered to describe the functionality:

1. Excise Transfer invoice with excise duty, other taxes and other charges2. Excise Transfer invoice with CVD/ADC VAT

Excise Transfer invoice with excise duty, other taxes and other charges

Navigation:Warehouse → Planning & Execution → Transfer Orders

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Click on the Others tab

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Field Description

Date of RemovalDefine the date of removal of goods fromthe factory in this field .

Time of RemovalDefine the time of removal of goods fromthe factory in this field .

LR/RR No. Define the Lorry Receipt /Railway ReceiptNumber (LR/RR No.) in this field.

LR/RR Date Define the Lorry Receipt/Railway ReceiptDate (LR/RR Date) in this field.

Vehicle No. Define the number of the vehicle, which isused to send the goods in this field.

Mode of Transport Define the mode of transport of goods inthis field.

Enter the following details on the Transfer Order header:

Transfer-from Code GREEN Transfer-to Code BLUE In.-Transit Code OUT. LOG. Structure STR6 Posting Date 01/04/07 Shipping Agent Code DHL Time of Removal: 1:52:31 PM Mode of Transport Road Vehicle No HR 26 / 2475

LR/RR No LR / 9758 LR/RR Date 01/04/07

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On the Transfer Order first line:

No.: 1000 Description: Bicycle Quantity: 10 Unit Price: 4000

On the Transfer Order second line:

No. 1110 Description: Bicycle Quantity 20 Unit Price 400


Post Transfer Order

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Open the Transfer Shipment Line – Zoom window for first Transfer Shipment line

The program populates 32.48 as Excise Effective Duty rate.



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